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Posted by Steve on Tuesday, December 16, 2008 at 10:45:58 :
In Reply to: Re: Crunching Numbers posted by MoparNorm on Monday, December 15, 2008 at 10:53:43 :
"Keep in mind that the mortgage and banking industry collapsed with only 3% of the loans classified as "sub-prime"."
Norm, I'm afraid that is simply not correct.
That is just what they are telling you.
Research the derivative markets and how they work, and you will find that the banks are failing because they've made huge bets on the derivative side to appease greedy wallstreet. Now the margin calls are coming due and they are on the wrong side of the fence without enough money... The calls are in the hundreds of billions.
Further, ever wonder why the US is dragging most of the world's economies down with us? It's because these same derivatives have been sold world-wide.
Last year, the derivative markets totaled approx 153 TRILLION dollars.
They are traded on private markets that are fully unregulated thanks to regulations passed at midnight back in 2000. This is a case study of what happens with no regulation.
I recently read in the WSJ that 80 of America's GDP last year came from the financial sector. If that's true, we are in deep, deep doo doo.
That is what is really going on.
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