Will US Taxpayers have to pony up for investment bank fraudsters?

The general idea is that real estate is a local market and you wouldn't have national across the board real estate prices dropping.

 

Real estate is local when you are talking about people buying a place to live.

However speculation is a national market. A lot of the flippers spread out from California in Arizona, New Mexico and Las Vegas.

Both Coasts have big bubbles. Texas and the Midwest are still cheap.

 

The midwest maybe cheap but the price is still falling.

 

You are right but in absolute terms not much. It's something like a $130,000 house goes to $120,000 for a $10,000 loss

House in the bubble markets are dropping anywhere between on average $50,000 and still falling.

 

and worst of all, these investment bank's chief's are still raking in Million$$$$ in bonuses and exotic holiday's...

 

Investment Bankers rarely loose.

 

So I see the tax payer in Britain had to pony up. This sets a precedent even though its in another country.

 

It was only 50 Billion. The total subprime market is around 30% of the US bond market.

 

It's not the subprime mess, its the $40 trillion dollars worth of credit default swaps, roughly twice the size than the all of the US stock markets.

 

I think we over reacted to the crisis, I understand people will default on their homes and home vaules will fall, but is your house really only worth 27% was it was selling for two years ago. In other worlds is the house that sold for $1 million two years worth only $270,000 today?

 

In some of the bubble markets home prices are up over 300% since 2001

The value of a home is historically 10x annual rent

What more is a home worth than the building lot and value of construction.

There are huge homes selling for $164,000 in Austin and the same home is costing $700,000+ in New Jersey. That's quite a difference.

 

anything is only worth as much as people are willing to pay for it. Does the house that sold for 1 million two years ago even cost 270.000 to build? Probably not

 

Yeah and a lot of these people who buy this insurance don't even know who should be paying them in case of a default.

The market is HUGE, back in like 2000 it was like $1 Trillion now it is $40! Talk about expansion. It is larger than the US equity, treasury, and mortgage markets combined, with trillions more of wiggle room. There is also a pricing problem because of the lack of regulation this market has, hedge funds and financial firms may have artificially inflated the prices to make gains on financial statements, but who knows when it actually comes down to it, there may be some large write offs.

Added: As it is hard to price this crap it is also hard to put a size to the market, so who knows about the exactness of the values, but just know, it is very large.

 

What your doing is trying to compare similar house in different markets and saying and it doesn't work like that, the house in new jersey has to deal to new jersey laws and economic conditions which maybe different then the laws and economic conditions in Austin.

 

The only explanation for the size of this market is that its a ponzi scheme.

 

Bingo!!! Ding Ding Ding! We have a winner!

Pretty much anywhere, there is an absence of REAL PRODUCTIVE GAIN, you'll find some sort of Ponzi scheme behind the growth.

 

The market is HUGE, back in like 2000 it was like $1 Trillion now it is $40! Talk about expansion. It is larger than the US equity, treasury, and mortgage markets combined, with trillions more of wiggle room.

40 trillion dollars is a lot of money and no way is it anchored in true asset valuation.

 

Looks like Ambac may be getting some help next week, the market rallied hard after it was reported that a mess of banks would inject cash into Ambac.

 

The U.S. bond insurance industry guarantees approx $2.4 trillion of debt

There is no way they have enough equity to cover it

 

Coalition of the Billing