> Won wrote: > happen even if it was triggered by something else. While we could argue > over what to call the bottoming of the real estate market, I feel > comfortable calling a 8%+ default rate on subprimes a crisis. >
Well I'd toss out 3 points to that: (1.) Since pre-2001 the CFMA didn't exist (and probably didn't get rolling until 2004) we have no way of knowing this but ... think if you could've bought swaps or created CDO-type securities against the internet bubble stocks ... would we have had a different result? Not in my book. Thus the problem is not the underlying asset, it's the bet and thus the system. (2.) Every single sub-prime including Alt-a, et al is ~$1 trillion in total. Even if we agree that 20% are totally worthless (not your 8% number), that's $200 million. Big deal. The gov't could just buy every single one and be done with it. (3.) Let's assume there was no CFMA meaning we just had $200 million in bad loans. If anti-trust was working as intended, there'd still be no crisis just a bunch of bankrupt bankers. W00t! Which brings us back to the system problem. CONCLUSION: it was a systemic failure exacerbated by the CFMA and nothing to do with the underlying assets that failed. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~| Adobe® ColdFusion® 8 software 8 is the most important and dramatic release to date Get the Free Trial http://ad.doubleclick.net/clk;207172674;29440083;f Archive: http://www.houseoffusion.com/groups/cf-community/message.cfm/messageid:286783 Subscription: http://www.houseoffusion.com/groups/cf-community/subscribe.cfm Unsubscribe: http://www.houseoffusion.com/cf_lists/unsubscribe.cfm?user=11502.10531.5
