From: "mich" 
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 20:46:00 -0500
Bytes: 2947


 FrediFizzx  wrote
> mich  wrote
>> FrediFizzx  wrote
>>> Rod Speed  wrote
>>>> 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.

The question is where did the money go. The buyer of the house has a house 
that is worth $50 000 less than what he paid. Accept the facts and move on.