From: "FrediFizzx" 
Newsgroups: misc.invest.stocks misc.consumers.frugal-living misc.invest.real-estate
Subject: Re: Where did the 400 billion USD in subprime mortgage losses go
Date: Sat, 1 Dec 2007 11:15:13 -0800
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"mich"  wrote in message 
news:J_h4j.91889$qP4.124233@weber.videotron.net...
>
> "FrediFizzx"  wrote in message 
> news:5qhfkiFvj35pU1@mid.individual.net...
>> "Rod Speed"  wrote in message 
>> news:5qgub4F103pskU1@mid.individual.net...
>>> FrediFizzx  wrote:
>>
>>>> Good example.  The money is still out there.  The people that sold 
>>>> at the top have the money.
>>>
>>> No they dont when the whole market drops significantly due to the 
>>> large
>>> oversupply of houses that are the result of mortgage defaults with 
>>> those
>>> who should never have been given that mortgage in the first place.
>>
>> What the heck does that have to do with people that sold at the top? 
>> This totally answers the OP's original question as to where the money 
>> went.  It doesn't just vaporize.
>
>
> The seller of the $300 000 house has $300 000 in cash.
>
> The buyer had a $300 000 house that's only worth $250 000.

So what?  That is an "unrealized" loss of $50K if the buyer hangs on to 
it.  In five years or so the house might be worth $350K for an 
unrealized gain of $50K on the worth of the house.  If the buyer 
defaults and the bank losses the $50K, the seller is the one who has the 
real money gain that the bank lost.

Fred