Once again, America, it's not the mortgages, stupid, it’s the DERIVATIVES!
SIXTY-TWO TRILLION in derivatives -- collateralized by less than $1.5 Trillion in mortgage backed securities -- to be exact.
The U.S. economy can survive – even if e.g. $3 Trillion in mortgages and property values essentially went to ZERO -- which would never happen anyway... because at some point, say $0.05 to $0.20 on the dollar, there are buyers – there always are. That’s why we call it market-based Capitalism!
Hell, the stock market lost a TRILLION yesterday alone! Has Nuclear Winter ensued? Well, I don't know about you, Mr. and Mrs. TV robot consumer/voter, but the sky is clear and the sun is shining where I live!
However, Wall Street cannot survive $62 Trillion in derivatives going to zero. Their business/economic model is broken, and was catastrophically flawed to begin with.
Suddenly, today, Wall Street’s financial “engineers” can no longer “manufacture” new ways to turnover the same nickel 1000 times, aggregating BILLIONS in fees from those transactions.
That is America’s problem – i.e. economy/government by Wall Street, through Washington. It is fundamentally a house of cards. And guess what? The house of cards may finally be collapsing.
To this I say: Good riddance!