And the scope of this crisis is another 2 trillion possibly, assuming the taxpayers are on the hook once again following another round of bank bailouts (not unthinkable):
Foreclosuregate Fallout: How Bad Can It Get for Wall Street?Wednesday 20 October 2010
by: Zach Carter | AlterNet | Report
Foreclosure fraud is ruffling a lot of feathers on Wall Street, and while the full scope of losses remains unclear, even major banks are now acknowledging that this is a multi-billion-dollar disaster, not just a set of minor paperwork headaches.
So how bad will it get for Wall Street? There are several disaster scenarios in which the housing market simply shuts down, where the potential losses for Wall Street are simply incalculable. But even situations that do not directly rip apart the basic functioning of the mortgage system could be enough to shut down one or more big banks, creating serious trouble for the financial system, and a major test of the recent Wall Street reform bill.
JPMorgan Chase loves using its research department to push its political agenda, and the bank is currently characterizing the foreclosure fraud outbreak as a set of “process-oriented problems that can be fixed.” That puts them in the rosy optimist camp for this crisis, and they’re projecting a total of $55 billion to $120 billion in losses for the entire industry, spread out over a few years.
But take a look at the analysts’ methodology. The actual scope of losses gets drastically larger if you just change a few arbitrary assumptions.
JPMorgan’s analysts look at about $6 trillion in mortgages issued between 2005 and 2007—this is the height of the bubble, but it excludes plenty of lousy loans issued in 2003, 2004 and 2008. They then estimate defaults of $2 trillion and losses of $1.1 trillion on those defaults.
continued:
http://www.truth-out.org/zach-carter-foreclosuregate-fallout-how-bad-can-it-get-for-wall-street64503?utm_source=twitterfeed&utm_medium=twitter-----------------------------------------------------------------------------------------------------------------------------------------
BTW, 2 trillion USD (2,000,000 million) divided by 300 million men, women and children is 6,666.66$ a piece.
