InsaneTrain Forums
world banking crisis - Printable Version

+- InsaneTrain Forums (https://insanetrain.com)
+-- Forum: General (https://insanetrain.com/forumdisplay.php?fid=4)
+--- Forum: General Forum (https://insanetrain.com/forumdisplay.php?fid=8)
+--- Thread: world banking crisis (/showthread.php?tid=46322)


world banking crisis - who - 10-13-2008

http://news.bbc.co.uk/1/hi/business/7665683.stm

world banking crisis - who - 10-13-2008

http://ftalphaville.ft.com/blog/2008/10/12/16931/kemp-the-united-states-is-now-in-some-very-general-sense-bankrupt/

First take a deep breath, and recall President Franklin Roosevelt’s wise advice that there is nothing to fear but fear itself.

Then let’s admit something painful: The United States is bankrupt, in the sense that it’s assets (housing stock, corporations and cash flow, plant and machinery) are now worth much less than its liabilities (in the form of mortgage-backed securities, other debt and loan instruments). In particular, large parts of the housing stock are now worth much less than the owners paid for them, and less than the outstanding value of the mortgages, or the collateralised bonds that have been issued against them.

US house prices have already fallen around 20% from their peak according to the Case-Shiller index of repeat home sales in 20 metropolitan areas, and there is little doubt they will now fall further, perhaps another 10% or more, as the credit crisis works its way through the real economy, raising unemployment, depressing incomes, and making refinancing increasing difficult. Even after current and prospective price falls, US households still have considerable NET equity in their homes.

By the end of H1 2008, homeowners still held about $8.7 trillion worth of net equity after adjusting for mortgages, according to the Federal Reserve’s Flow of Funds Accounts (Table B100 line 50). Households real estate assets were valued at $19.429 trillion while they had borrowed $10.639 trillion against them. But net equity had already fallen -$1.135 trillion (-11.4%) from its peak in Q1 2007, when it stood at $9.924 trillion, and the equity cushion will continue to shrink as home prices fall while the debts secured against them remain unchanged

world banking crisis - who - 10-13-2008

http://www.news.com.au/business/money/story/0,25479,24481708-14327,00.htmlhttp://www.news.com.au/business/money/story/0,25479,24481708-14327,00.html