These is the kind of patterns one would expect to emerge as...

These is the kind of patterns one would expect to emerge as banks start to get the jitters. Just study the UK housing crash sequence (relatively a minor event compared to the US crash which was smaller yet again to and our upcoming one).

Tighter lending criteria means less money that can be borrowed. Less money --> lower bids. Lower bid --> lower prices. Lower prices --> more people wanting to sell. More supply - less demand --> lower prices still --> banks tighten more (and so on and so forth until the meltdown goes auto-pilot).

Often, the scary stuff is circulated in internal memos maked CONFIDENTAL - NOT FOR EXTERNAL DISTRIBUTION.

Bad debts will be a real problem and they must rein in now to minimize the damage. In any case, the horse has already bolted.