Topslide-
I am interested in your comments about houses as I think that could be the trigger that causes the final collapse of the financial system in its current form within the UK.
My thinking goes along the lines that most people have had to take a mortgage out to buy a home. While they stay in employment they can afford the payments. Assuming massive job losses, many won't be able to pay the mortgage. Given 'normal' conditions they would sell the house and clear the loan (given no negative equity).
In the current situation people who would 'normally' be regarded as good borrowers are unable to obtain a mortgage due to the credit squeeze. Coupled with this the confidence in the housing market has collapsed, hence rapidly falling prices.
The result of the above will mean millions of people will not be able to get rid of their homeloans. However, when they default on the loan and possibly give up and hand the keys back to the bank/lender, the result will be that these lenders end up with thousands or millions of properties that they cannot sell (or at least sell at realistic prices). What happens then?