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Comments from E-Trade President Jarrett Lilien in a pre-conference call interview with MarketWatch’s Murray Coleman about the company’s mortgage mess pretty much say in a single sentence all you really need to know about this country’s credit crunch: “Our issue is that the value of high-quality loans is underperforming.” High quality loans.

I live in a fairly upscale part of suburban tractville in San Diego. Lots of homes built in the past year or two or three nearby. This weekend was the first time I’ve seen a sign on the main drag pointing to an open house and “foreclosure auction” in an area where homes are probably in the $1 million range. This ain’t where you’re supposed to see foreclosures.

Also, for what it’s worth — and admittedly very anecdotal — lots more realtor open house signs on the weekend than there were in the peak spring selling season.

The beat goes on…

Source: E*Trade's Dilemma: It's Not Just Subprime