[expatpat]

Let’s say there are 100 million homes, so there are about 5% (let’s be generous) or 5 million mortgages in jeopardy. Let’s say the average loan is $400K, that is $2 trillion at risk

[ClearCase_guy]

Let’s say there are 100 million homes, so there are about 5% (let’s be generous) or 5 million mortgages in jeopardy. Let’s say the average loan is $400K, that is $2 trillion at risk

But I'm still confused.

$2T is at risk. That does mean $2T has been lost. It just means there is a risk. We just three $850B at the problem which covers more than one third of that risk. And let's also note that the 5 million homes who have "at risk" mortgages will never be worth precisely nothing. They are wood and stone, these are viable dwelling places.

I just don't see how this amount of risk, which is collateralized with tangible assets can destroy the entire world's economic infrastructure.

[21twelve]

I’m not sure what they mean when they say some banks are leveraged at 40 to 1. I’m guessing it means that for every dollar they have they borrowed another 40 to use?

And the $2 trillion in money at homes at risk was part of that original dollar. So now the banks are at risk for a total of 40 x 2 trillion? Although I seem to recall the value of credit derivitives is around 50 trillion. So - perhaps its not as bad as I think! /s