Parmenides
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- 5 Sep 2007
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De www.beppegrillo.it
"The forecasts about the crisis in the real estate market in the United States are for heart attacks. You remember the subprime, the mortgages given to anyone without checking up on their income and then transformed into investment funds placed to the right, left and centre? The bank sold the mortgage and the fund with the mortgage inside. Great. Some banks like Northern Rock, got blown into the air and the value of their shares taken down to almost zero.
Ben Bernanke, the head of the Federal Reserve, in July 2007, forecast the damage to the American financial system to be 100 billion dollars. Later Goldman Sachs altered the estimate to 500 billion dollars. Recently Nouriel Roubini of the New York University Stern School of Business, raised the level to 3,000 billion dollars. That’s equal to 20% of the USA’s GDP. Roubini estimates a collateral effect on the United States Stock Exchange as a loss of 5,600 billion dollars
Roubini’s pessimism, or perhaps realism, goes as far as forecasting a loss in overall value equivalent to the entire annual GDP of the United States. The price of houses has gone down by at least 10% of the maximums and it is envisaged that there’ll be a further 20% reduction. Those who are paying a mortgage often hand over the keys to the banks when they realize that the mortgage on the house is greater than the market value of the house. The bank then has to devalue its stock of buildings. To recover from the abyss of financial losses they call in loans at risk. And they sell the most vulnerable shares.
There’s a decrease in value of the banks, shares, houses and all of a sudden, no one is making loans anymore. The value of the dollar collapses, 63,000 jobs fewer in February 2008. In these cases, there’s always talk of a new 1929, given the scenario, it’s not excluded that that could happen.
The average Italian with a salary among the lowest in Europe, taxes among the highest in the world, and indecent public services can believe that they are safe from this financial tsunami. It seems difficult that it could be worse than this. It’s better to take some tiny precaution anyway so as not to be completely ruined. For those who have no money, don’t take out a loan. For those who still have money, don’t invest it in funds and put off buying a house.
Towards the catastrophe with optimism.
For more information: Martin Wolf’s blog, Financial Times
Nouriel Roubini’s blog."
Ahi es na.....
"The forecasts about the crisis in the real estate market in the United States are for heart attacks. You remember the subprime, the mortgages given to anyone without checking up on their income and then transformed into investment funds placed to the right, left and centre? The bank sold the mortgage and the fund with the mortgage inside. Great. Some banks like Northern Rock, got blown into the air and the value of their shares taken down to almost zero.
Ben Bernanke, the head of the Federal Reserve, in July 2007, forecast the damage to the American financial system to be 100 billion dollars. Later Goldman Sachs altered the estimate to 500 billion dollars. Recently Nouriel Roubini of the New York University Stern School of Business, raised the level to 3,000 billion dollars. That’s equal to 20% of the USA’s GDP. Roubini estimates a collateral effect on the United States Stock Exchange as a loss of 5,600 billion dollars
Roubini’s pessimism, or perhaps realism, goes as far as forecasting a loss in overall value equivalent to the entire annual GDP of the United States. The price of houses has gone down by at least 10% of the maximums and it is envisaged that there’ll be a further 20% reduction. Those who are paying a mortgage often hand over the keys to the banks when they realize that the mortgage on the house is greater than the market value of the house. The bank then has to devalue its stock of buildings. To recover from the abyss of financial losses they call in loans at risk. And they sell the most vulnerable shares.
There’s a decrease in value of the banks, shares, houses and all of a sudden, no one is making loans anymore. The value of the dollar collapses, 63,000 jobs fewer in February 2008. In these cases, there’s always talk of a new 1929, given the scenario, it’s not excluded that that could happen.
The average Italian with a salary among the lowest in Europe, taxes among the highest in the world, and indecent public services can believe that they are safe from this financial tsunami. It seems difficult that it could be worse than this. It’s better to take some tiny precaution anyway so as not to be completely ruined. For those who have no money, don’t take out a loan. For those who still have money, don’t invest it in funds and put off buying a house.
Towards the catastrophe with optimism.
For more information: Martin Wolf’s blog, Financial Times
Nouriel Roubini’s blog."
Ahi es na.....
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