Thanks for the post SHILOH. Those numbers provide a good context of where we are. Everybody is obsessed with the FED and congress over how they will handle / bailout the housing situation. The truth of the matter is that all of these ideas being bandied about from increasing limits on FHA loans to slashing the Fed Funds Rate will amount to the “Mouse that Roared” if they are enacted. You basically have approximately $150 to $200 Billion in actual credit losses that have contaminated between $5 to $10 TRILLION dollars of CDO derivatives. We have to keep some since of proportionality here, the busting of the credit bubble and the resulting credit and liquidity crunch is like an angry male buffalo beginning to charge, the FED has been charged to stop its stampede armed with a B B gun (no pun intended).
The new paradigm in modern finance of spreading risk throughout the derivatives markets so as to not be too concentrated in one area has hit a major snag. Instead of spreading risk these new vehicles have contaminated the global financial market with toxic waste that no one wants to touch. So who were the freaking geniuses that thought this up?? What were you f*#king thinking?? If the end result of the new paradigm in modern global finance results in a lender giving somebody with no job, no income and no assets a $500K loan then maybe its time go back to the drawing board. I mean these people sounded pretty good on the way up, now they just look Stupid.
