From: soula avramidis
Is this true
Mortgage-backed securities in circulation total $11,000 billion. US
real estate is overvalued by 20 to 30 percent. If a quarter of the
wealth of US households vaporizes, that represents $2,750 billion worth
of debt that will probably not be repaid and will become losses for the
financial system.
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CB: Loss to the capitalists, gain to the working class as debtors ?
^^^^^
According to the study by Greenlaw, Hatzius, Kashyap and Shin (pdf),
the total capitalization of United States' banks, government agencies
and savings banks amounts to $1,681 billion.
Their direct exposure to mortgage securities totals $5,591 billion, or
half of the outstanding amount. They are, consequently, potentially
faced with write-downs of up to $1,375 billion - close to their total
capital.
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