This is an alarming statistic: Ten percent of all U.S. homeowners now owe more than their homes are worth.

According to the Times, this is something this country hasn't seen since the Great Depression. Washington is trying to find a way to bail out homeowners and banks that are struggling mightily with this crisis. Politicians have to balance the need to prevent a wholesale financial disaster and angry constituents like me who weren't stupid enough to use their homes like ATM machines.

I had also watched a segment recently on 60 Minutes about homeowners who were walking away from homes they owed too much on. In states like California, the consequences of voluntarily defaulting are minimal. It would seem to me that, for the first time in history, it's the borrowers who have the power now, not the lenders.

What if all of these upside down homeowners got together and told the banks where to stick their mortgages? What if they threatened to stop making payments unless they all got a super-sweetheart deal? With the organizing ability of the Internet, how many homeowners would you have to get together to create a very powerful negotiating position?

The banks would freak. Their stocks would tank. They would have to come up with a deal or face certain ruin.

Maybe this is how Karl Marx envisioned the fall of capitalism, with the capitalists being victimized by their own greed, and the former victims forcing them to to their knees.

Debtors of America unite! You have nothing to lose but your mortgages!

Here is a great rundown on just how the mortgage mess was allowed to happen. In no small part, it was because certain ratings agencies classified some very risky securities as AAA, the same rating as government bonds. And there were no regulators around to blow the whistle.

My upcoming column is on the mortgage mess, but of course, Paul Krugman is way ahead of me.

In my column, I argue that regulation is necessary for businesses to survive, just as controlling combustion inside an engine is necessary for it to run. Krugman hits a similar note:

So where were the regulators as one of the greatest financial disasters since the Great Depression unfolded? They were blinded by ideology.

“Fed shrugged as subprime crisis spread,” was the headline on a New York Times report on the failure of regulators to regulate. This may have been a discreet dig at Mr. Greenspan’s history as a disciple of Ayn Rand, the high priestess of unfettered capitalism known for her novel “Atlas Shrugged.”

In a 1963 essay for Ms. Rand’s newsletter, Mr. Greenspan dismissed as a “collectivist” myth the idea that businessmen, left to their own devices, “would attempt to sell unsafe food and drugs, fraudulent securities, and shoddy buildings.” On the contrary, he declared, “it is in the self-interest of every businessman to have a reputation for honest dealings and a quality product.”

It’s no wonder, then, that he brushed off warnings about deceptive lending practices, including those of Edward M. Gramlich, a member of the Federal Reserve board. In Mr. Greenspan’s world, predatory lending — like attempts to sell consumers poison toys and tainted seafood — just doesn’t happen.

It's not every day you get some new terminology to decribe what a mess banks made in regards to the housing bubble.

If every upside down homeowner resorted to "jingle mail" (mailing the keys to the lender), the losses for the lenders could be staggering. Assuming a 15% total price decline, and a 50% average loss per mortgage, the losses for lenders and investors would be about $1 trillion. Assuming a 30% price decline, the losses would be over $2 trillion.

Not every upside down homeowner will use jingle mail, but if prices drop 30%, the losses for the lenders and investors might well be over $1 trillion (far in excess of the $70 to $80 billion in losses reported so far).

I can imagine that a whole bunch of people who bought homes in the last couple of years, seeing them now worth less than what they owe, taking this option out. Why not? Actually, I think upside down homeowners can use this leverage to negotiate better terms with the banks, forcing them to eat some significant losses.

Again, we hear these excuses that "no one could have predicted..." about the housing bubble, and resulting mortgage mess. But check out the numbers. People weren't paying attention. Irrational exuberance all over again. The greedy get too greedy and begin believing their own BS.

If you think the whole subprime mortgage mess is caused by people with poor credit taking out loans they couldn't afford, think again.

Turns out that lenders had incentives to sign up even those with good credit into these riskier loans. And some lenders used questionable practices to earn those incentives.