[mkwin]

$this->bbcode_second_pass_quote('clueless', '')$this->bbcode_second_pass_quote('', 'T')he total value of those 6 million mortgages is, assuming average mortgages of £150,000, is

900,000,000,000 or $900 billion. Assuming 50% of those properties are re possessed and sold for 80% of their market value, there would be a loss of $90 billion.

A significant figure but hardly the cataclysmic. Considering we lost many trillions of dollars with the dotcom crash and this wasn't the end of the world.

[shortonoil]

$this->bbcode_second_pass_quote('', 'W')e don’t know yet but even in the worse case it won’t be as bad as the dotcom fiasco.

[clueless]

$this->bbcode_second_pass_quote('', 'W')ealth doesn't vanish - of course it does?? Were did all the value go from the stock markets following the dotcom crash? It does simply vanish, firms go bankrumpt, share prices crash and value disappears. Have you never heard of Enron or Worldcom?. There are many examples of bubbles in history when they pop much of the wealth is lost.

[mkwin]

$this->bbcode_second_pass_quote('shortonoil', '')$this->bbcode_second_pass_quote('', 'C')ouple of points; 1) The central bank system is regulated - less so in the US than Europe but still regulated. The banking system is highly regulated. 2) Fractional lending has been around since the creation of the central bank systems. 3) The economy and the financial markets have been driven by a prolonged business cycle upturn. This is due to historically low inflation which is due to globalisation.

[clueless]

$this->bbcode_second_pass_quote('', 'R')eal estate and construction in generally circa 10% of GDP. A significant component but not a driver of the business cycle.

[mkwin]

$this->bbcode_second_pass_quote('shortonoil', '')$this->bbcode_second_pass_quote('', 'W')e don’t know yet but even in the worse case it won’t be as bad as the dotcom fiasco.

[mkwin]

$this->bbcode_second_pass_quote('clueless', '')$this->bbcode_second_pass_quote('', 'R')eal estate and construction in generally circa 10% of GDP. A significant component but not a driver of the business cycle.

[clueless]

$this->bbcode_second_pass_quote('', 'T')he scale of the loss here is in the tens of billions, possibily just into the hundreds of billions if there is a big recession, not the trillions experinced in the dotcom bust.

[shortonoil]

$this->bbcode_second_pass_quote('', '9')00,000,000,000 or $900 billion. Assuming 50% of those properties are re possessed and sold for 80% of their market value, there would be a loss of $90 billion.

[clueless]

$this->bbcode_second_pass_quote('', '1')0% - equity release from increasing house prices has driven consumption growth somewhat but that has accounted for 1-2% GDP.

[clueless]

$this->bbcode_second_pass_quote('', 'W')ho do you propose they sell those home to for 80%, when the US already has a backlog of 4 million unsold homes. 11 % of the homes in the country are vacant and housing looks to have gone down 8% last month. 20% of potential buyers will be washed out of the market during the next two years. The above piece is nothing but a bit of fantasy.

Plus, it appears that probably 90% of the subprime borrowers will eventually default.

[mkwin]

$this->bbcode_second_pass_quote('clueless', '')$this->bbcode_second_pass_quote('', 'T')he scale of the loss here is in the tens of billions, possibily just into the hundreds of billions if there is a big recession, not the trillions experinced in the dotcom bust.

[shortonoil]

$this->bbcode_second_pass_quote('', '9')00,000,000,000 or $900 billion. Assuming 50% of those properties are re possessed and sold for 80% of their market value, there would be a loss of $90 billion.

[clueless]

$this->bbcode_second_pass_quote('', '1')) Firms became insolvent - their assets were sold at deflated prices by creditors.

2) Share prices collapsed - Which was unrealized wealth. I could buy a stock that increases in value from $1 to $10 without selling it because the profit growth prospects cause the share to be valued in this way. Wealth doesn't have to be in circulation to be wealth. This massive loss of share value is the reason the FED cut rates to 1% because they feared deflation.

3) Bad debts - Many of these firms Enron/WorldCom/Global Crossing borrowed large amounts from banks as well. These loans were secured on future profit growth expectations. So many of these loans were written off by the banks – again hundreds of billions of dollars, much of it wasted.

[mkwin]

$this->bbcode_second_pass_quote('shortonoil', '')$this->bbcode_second_pass_quote('', '9')00,000,000,000 or $900 billion. Assuming 50% of those properties are re possessed and sold for 80% of their market value, there would be a loss of $90 billion.

[clueless]

$this->bbcode_second_pass_quote('', 'T')his is the same methodology that the big financial houses have been using for quite a while. The little guy, especially if he is a short trader gets burned every time. Look what a job that they did on Amaranth. You can bet that GS, JP Morgan and Bears Stern are planning right now, how to dump their junk before the rest of the trading community really figures out what a mess they are in. The problem is, as they have recently found out, it isn’t worth anything.

[mkwin]

$this->bbcode_second_pass_quote('clueless', '')$this->bbcode_second_pass_quote('', '1')) Firms became insolvent - their assets were sold at deflated prices by creditors.

2) Share prices collapsed - Which was unrealized wealth. I could buy a stock that increases in value from $1 to $10 without selling it because the profit growth prospects cause the share to be valued in this way. Wealth doesn't have to be in circulation to be wealth. This massive loss of share value is the reason the FED cut rates to 1% because they feared deflation.

3) Bad debts - Many of these firms Enron/WorldCom/Global Crossing borrowed large amounts from banks as well. These loans were secured on future profit growth expectations. So many of these loans were written off by the banks – again hundreds of billions of dollars, much of it wasted.

[clueless]

$this->bbcode_second_pass_quote('', 'T')he point is some of the figures thrown around here like $100 trillion is nonsense.

[clueless]

$this->bbcode_second_pass_quote('', 'c')orresponding removal of value out of that market.

[mkwin]

$this->bbcode_second_pass_quote('clueless', '')$this->bbcode_second_pass_quote('', 'T')his is the same methodology that the big financial houses have been using for quite a while. The little guy, especially if he is a short trader gets burned every time. Look what a job that they did on Amaranth. You can bet that GS, JP Morgan and Bears Stern are planning right now, how to dump their junk before the rest of the trading community really figures out what a mess they are in. The problem is, as they have recently found out, it isn’t worth anything.