percysunshine
Diamond Member
It had to go somewhere....
The other side of the trade.
It is an interesting topic. Some group like Chase, or Barclays loses a couple billion dollars, but the money did not evaporate, it just changed hands. Someone is always on the other side of the trade, or there would never be a trade in the first place.
All that housing money that supposedly evaporated in the 2008 realestate bubble? It just traded hands. People who bought a house in California for $50,000, and then sold it 7 years later for $500,000 were the other hands.
Not entirely accurate. When a bank writes down a mortgage in default, that money extinguishes from existence. It was just debt money assumed to exist that the bank created in the first place by offering the loan.
An unpaid loan is an unpaid loan. Someone got the money up front.