The Economy's $2 Trillion Worry-(sub-prime,toxic debt tally)

business week ^ | November 19, 2007, 1:22AM EST | by Steve Rosenbush

[Flavius]

The subprime spread continues: A Goldman Sachs report says the overall impact of mortgage losses on economic activity could be huge

Just a few months ago, analysts believed the collapse of subprime mortgage securities and related investments would lead to losses of $50 billion to $100 billion, a large but manageable number. Now, a new report from Goldman Sachs (GS) says losses from subprime exposure could be much larger than recently assumed, hitting as much as $400 billion. But that's not the extent of the financial carnage: Goldman said the full impact on the economy could be even more substantial, because the losses could compel banks and other lenders to curtail lending by as much as $2 trillion.

[Flavius]

[Ken522]

That’s a lot of beer ,,,

[2ndDivisionVet]

It is not sub-prime loans, per se, that are the problem, but rather the rampant fraud that occured in the last 10 years involving conforming AND subprime loans that is the problem. No one knows how many (and which) of these loans are valid and how many were the result of fraud. There are MANY guilty parties, such as appraisers, banks, loan officers, realtors, mortgage brokers, the companies themselves and the feds. Anyone outside the mortgage industry would be amazed at the money that was made by many during the last decade.

[Travis McGee]

The bank mania is raising up a moneyed aristocracy in our country which has already set the government at defiance, and although forced at length to yield a little on this first essay of their strength, their principles are unyielded and unyielding. These have taken deep root in the hearts of that class from which our legislators are drawn, and the sop to Cerberus from fable has become history. Their principles lay hold of the good, their pelf of the bad, and thus those whom the Constitution had placed as guards to its portals, are sophisticated or suborned from their duties.

~~Thomas Jefferson to Dr. J. B. Stuart, 1817

"There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as a result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved."

~~Ludwig von Mises

"Let me issue and control a nation's money supply, and I care not who makes its laws."

~~Mayer Amschel Rothschild

"I am one of those who do not believe the national debt is a national blessing... it is calculated to raise around the administration a moneyed aristocracy dangerous to the liberties of the country."

~~Andrew Jackson, letter, April 26, 1824

[Hydroshock]

Economy/Credit/Housing Issues Ping List

If you want on or off this list let me know.

[Pining_4_TX]

So Goldman Sachs is flailing about issuing dire warnings of huge economic dislocation... Where were they a few years ago when they could have actually done something to rein in this excess and fraud?

I don’t trust any of these big financial firms. They created this mess, and now they want the taxpayers to bail them out. What a bunch of thieves.

[Pining_4_TX]

Wall Street Plans $38 Billion of Bonuses as Shareholders Lose

http://www.bloomberg.com/apps/news?pid=20601087&sid=ahE8xVisWsbE&refer=worldwide

[Travis McGee]

GS has the biggest inside track, they are virtually the investment bank grafted onto the Fed and the Treasury. (Note Paulson’s last employment.) I think their game is to be the last investment bank standing.

[Travis McGee]

Nov. 19 (Bloomberg) — Shareholders in the securities industry are having their worst year since 2002, losing $74 billion of their equity. That won’t prevent Wall Street from paying record bonuses, totaling almost $38 billion.

That money, split among about 186,000 workers at Goldman Sachs Group Inc., Morgan Stanley, Merrill Lynch & Co., Lehman Brothers Holdings Inc. and Bear Stearns Cos., equates to an average of $201,500 per person, according to data compiled by Bloomberg. The five biggest U.S. securities firms paid $36 billion to employees last year.

[Flavius]

actually reason I posted this and give more credence to this is that

as soon as the jig was up on phathom profits from lowest income bracket home owners

gold went against their trades as I think I understood from one of the financial guru blabber shows

short point is that they where right to short and could still have many short positions riding the disaster further down

they are an impressive money printing enterprize