$130 billion cost to cure entire mortgage crisis?

[jonnycsd]

Either my math is wrong or the bailouts are many times larger than the problem. The numbers are ballpark – and can be adjusted up or down a bit, but the conclusion remains unless there is an order of magnitude problem with my calculation. Piggs, what am I missing?

US Population 300 million
Average 2.5 people per household
Home ownership rate 68 percent
Percent of homes with a mortgage 80%

That gives 64 million residential mortgages. About 4% of these are in trouble, or 2.5 million. Estimate the (generous) average cost to fix each one at $50K – including principal writedowns, etc. Thats “only” $130 billion. Even if it has to be repeated every year for four years, thats still “only” $520 billion.

So, what gives with spending 2 TRILLION on bailouts if the underlying problem is fixed for $130 billion? Its bad enough to have bailouts, and even WORSE to spend so much more than it would take to fix the problem.

[scaredyclassic]

leveraged bets on the mortgages?

[scaredyclassic]

leveraged bets on the mortgages?

[scaredyclassic]

leveraged bets on the mortgages?

[scaredyclassic]

leveraged bets on the mortgages?

[scaredyclassic]

leveraged bets on the mortgages?

[jonnycsd]

yes, I can see all that layered up leverage magnifying the scale of the implosion, but if the entire market was redeemed wouldn’t then all the downstream bets follow the expected payout cuve?

[jonnycsd]

yes, I can see all that layered up leverage magnifying the scale of the implosion, but if the entire market was redeemed wouldn’t then all the downstream bets follow the expected payout cuve?

[jonnycsd]

yes, I can see all that layered up leverage magnifying the scale of the implosion, but if the entire market was redeemed wouldn’t then all the downstream bets follow the expected payout cuve?

[jonnycsd]

yes, I can see all that layered up leverage magnifying the scale of the implosion, but if the entire market was redeemed wouldn’t then all the downstream bets follow the expected payout cuve?

[jonnycsd]

yes, I can see all that layered up leverage magnifying the scale of the implosion, but if the entire market was redeemed wouldn’t then all the downstream bets follow the expected payout cuve?

[TheBreeze]

This article says that the U.S. has spent or pledged $9.7 trillion on the bailout so far and that amount is enough to pay off 90% of the nation’s mortgages:

http://www.bloomberg.com/apps/news?pid=washingtonstory&sid=aGq2B3XeGKok

So obviously the OP is on to something. It looks like the Bush administration bailed out a bunch of Bush’s cronies while the whole time saying that they were looking to help out with mortgages. What a crock. I hope that Chimpy MFer ends up in jail.

[TheBreeze]

This article says that the U.S. has spent or pledged $9.7 trillion on the bailout so far and that amount is enough to pay off 90% of the nation’s mortgages:

http://www.bloomberg.com/apps/news?pid=washingtonstory&sid=aGq2B3XeGKok

So obviously the OP is on to something. It looks like the Bush administration bailed out a bunch of Bush’s cronies while the whole time saying that they were looking to help out with mortgages. What a crock. I hope that Chimpy MFer ends up in jail.

[TheBreeze]

This article says that the U.S. has spent or pledged $9.7 trillion on the bailout so far and that amount is enough to pay off 90% of the nation’s mortgages:

http://www.bloomberg.com/apps/news?pid=washingtonstory&sid=aGq2B3XeGKok

So obviously the OP is on to something. It looks like the Bush administration bailed out a bunch of Bush’s cronies while the whole time saying that they were looking to help out with mortgages. What a crock. I hope that Chimpy MFer ends up in jail.

[TheBreeze]

This article says that the U.S. has spent or pledged $9.7 trillion on the bailout so far and that amount is enough to pay off 90% of the nation’s mortgages:

http://www.bloomberg.com/apps/news?pid=washingtonstory&sid=aGq2B3XeGKok

So obviously the OP is on to something. It looks like the Bush administration bailed out a bunch of Bush’s cronies while the whole time saying that they were looking to help out with mortgages. What a crock. I hope that Chimpy MFer ends up in jail.

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