Every time economists and Wall Street executives think they have acknowledged the full extent of the losses from the meltdown in real estate mortgages, more bad news turns up.Ask yourself a question - what are the similarities of these two events? With both it was trusted financial institutions conducting shady business with the customer holding the bag. Will we need to bail out the financial institutions this time as well?
Merrill Lynch said yesterday that it would take a charge for mortgage-related securities on its books that is $3 billion more than the $5 billion it expected just two weeks ago. And a report from the National Association of Realtors showed that sales of existing homes in September fell twice as much as economists had expected, to their lowest level in nearly 10 years.
At this juncture, economists say the troubles in the mortgage market could, all told, cost financial firms and investors up to $400 billion.With numbers like this do you still think we can avoid a recession? This is what happens with a lack of regulation oh and of course a Republican administration that beleivves in letting industry police itself.
That is far more than the roughly $240 billion cost, adjusted for inflation, of the savings and loan crisis of the early 1990s, according to estimates of the combined financial toll of that crisis on both the federal government and private sector. The loss in total real estate wealth is expected to range from $2 trillion to $4 trillion, depending on how far home prices fall, according to several economists.