Someone has all this Brokerage investment bank meltdown Money!Where did the money Go?

Discussion in 'Economy' started by 52ndStreet, Sep 24, 2008.

  1. 52ndStreet
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    52ndStreet VIP Member

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    With all the media attention given to the Lehman Brothers, and Bear Sterns collaspe. I am asking my self one question. Where did all this subprime market
    money go.? Someone has this money. I don't know if they wired these funds overseas, to Swiss Bank, or Grand Cayman Island bank accounts, but this money
    was sent somewhere.!!.The federal governement must initiate an immediate investigation as to where all this money went to?!?.
     
    Last edited: Sep 24, 2008
  2. glockmail
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    To anyone who has sold a house in the resultant over inflated market.
     
  3. Zoomie1980
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    Zoomie1980 Senior Member

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    Simplistically, the money went to the people who sold the borrowers houses at a price that was grossly inflated. It was like paying $50,000 for a Ford Escort. The dealer got $50,000. The buyer got an Escort. The bank has a $50,000 interest in an Escort worth about $10,000. The lender sold that mortgage to someone else (who must have thought the Escort was actually worth $60,000 or would be soon but really wanted the 8.5% interest income on the $50,000 after the teaser rate was done). Others sold "derivatives" on that. Then the borrower defaulted. The new owners who thought they had a $60,000 Escort found out it was only worth $10,000. The shocked lenders realized ALL Escorts were worth only $10,000 even though they are still selling for $15,000, or $20,000 so they aren't about to loan any more until they are sure the Escorts are accurately valued.

    As for the sellers of those $50,000 Escorts. They mostly bought $50,000 Cavaliers for $40,000 and tried to repeat the process but then got stuck with Cavaliers also worth only $10,000......
     
  4. editec
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    editec Mr. Forgot-it-All

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    Some of it went to the everyone serving real estate industry, builders, and the people working in the finance industry.

    A LOT of it just evaporated of course when people refused to buy and sell those bonds, too.

    The assets went from having future value to having no future value.

    Their future value was based on FUTURE payments and since people are walking away from those debts, naturally that paper (which is a promise to pay more money in the future) is basically worthless.
     
  5. Care4all
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    Care4all Warrior Princess Supporting Member

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    if they are gonna bail anyone, they should use the money to refinance the homes of those in trouble, to fixed mortgages....

    THIS SECURES THE BANKS through trickle up! and immediately helps the rest of us owning homes.....

    if they don't do this and the fed gvt buys all those mortgages, those mortgages are useless and it will take decades to find owners for those homes....

    because millions of americans in default and bankruptcy, wipes out a good deal of the demand.
     
  6. 52ndStreet
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    52ndStreet VIP Member

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    The FBI , must recover these funds?!.Where is all this Money??.
     
  7. glockmail
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    Dude, you got three good answers for that question. Take your pick, or pick them all.
     
  8. 52ndStreet
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    52ndStreet VIP Member

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    Yes, you are right, those were three excellent answers.But my point still remains, some one is holding on to a lot of cash some where.We need to find these people, and try to recover some of this money.$700 billion dollars is
    a lot to pay to bail out these firms, who were either criminaly neglegent in
    their management of those funds, or who knowingly defrauded the government, and the public.
     
  9. JGTex
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    Where did the Money go? I found over 300.Billion of it!

    I found Over 300.Billion dollars of it that the economy has been losing for the past decade (1997-2007).

    Over 300.Billion dollars has been sucked out of the economy, that has NOT been spent on mortgages, new cars, college, medical insurance, put into savings, or spent at mom/pop stores or Wal-mart or anything else to help support the economy. Over 300.Billion dollars that was re-directed out of the economy and into only a few select pockets.

    Over 425 MILLION (410.M Speeding tickets, 25.M DUI Tickets) taxpayers were ordered to pay into it over the past decade (1997-2007), it was mandatory and it did not support the economy in any way. For a large percentage it will continue to be MANDATORY for another five to ten years (insurance/probation/points on driving record)...

    NHTSA and MADD are the ones that mis-directed over 300.Billion Dollars out of the economy into the pockets of the lawyers, courts, traffic schools, auto insurance companies,ignition interlock, etc.. This is just for the "BIG Two Tickets" Speeding and DUI. I didn't even try to find out about the lesser tickets, Reckless driving, stop sign/light, parking, seat belts, etc... Seems Gov. doesn't like to make it easy to find stats on all those..

    Did it help make our roads safer? Fars (NHTSA) shows only a difference of about 1000 drivers in ten years span (1996 thru 2006), involved in all fatal crashes... and a couple hundred difference for DUI drivers...

    When congress and the American citizens start getting serious about looking at reasons the economy is in a mess, first place to look would be here IMO...This money that has to be paid for "tickets" doesn't just miraculously appear, it is part of their "spendable income"...

    And of course the obvious of the "higher risk" for credit, housing, health care, etc.. sure put the brakes on that for a whole lotta folks, just didn't buy any..interesting to note that the companies that "assigned" them to the "higher risk" catagory are the ones going bankrupt...HUM.

    OH and BTW, Pres. Bush has guanteed this same thing happening for years to come...He appointed a Member of MADD as administrator of NHTSA... get out your checkbooks boys and girls, tickets have to be paid, mortgages DON'T in the world of MADDness...SO any guarantees that "OH we will get it back" is mis-leading, cause it is just going to keep going as long as our "MIGHT laws" keep sucking taxpayers dry...
    My opinion and published facts.
    Judy
     
  10. glockmail
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    Those people number in the millions and took their profits fair and square.
     

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