From: "Rod Speed" 
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: Sun, 2 Dec 2007 15:03:19 +1100
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FrediFizzx  wrote:
> "mich"  wrote in message
> news:j7o4j.29906$By5.104328@wagner.videotron.net...
>>
>> 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.

> Please learn the difference between "unrealized" and "realized" gains and losses.

Not relevant to what is being discussed.

> If you can't see that the seller got the money the bank lost when the buyer defaulted,

That isnt necessarily true when the seller will usually spend that money on a new
more expensive house and will suffer even more of a loss than the original buyer lost.

> then there is not much more help I can offer

You've never managed to grasp the basics, so you never ever had anything to offer.

> and my work here is done.

Nope, you've been done, like a dinner.