Could the US repossession scandal sink the banks again?

Only one day to go until 'the cuts'. It's like the mirror image of Christmas Eve. Instead of getting presents, tomorrow we'll wake up and find out about all the things that the government is planning to take away from us. I'm not going to waste your time here by speculating on what might happen. Obviously we've already seen several changes announced, but you never know what they'll pull out of the hat on the day. The key things to watch will be how the pound and gilts react. If the cuts are less violent than expected, we'll see a weaker pound, higher gilt yields and probably a relief rally in stocks. If they're tougher than expected (though that seems unlikely), the opposite will happen. In the meantime, let's take a look at something completely different – this US foreclosures business. It's been bubbling away in the background, but there's every sign that it won't stay that way...