Re: Due Diligence: Here's what's happening to US Financial Market
The person who sold the house to Joe got those $150,000 (or at least part of it, if they sold for a profit).
what did that person do with that money?
Not all of them spent it.
Some (many) invest it wisely or have it available in some bank account.
The money is there.
Joe lost.
The bank (or whoever bought the paper) lost.
the one who sold to Joe in the first place made some. That is the money I'm looking for.
Actually, it does not.so lets say Joe goes out and buys a home for $500,000 at the top of the RE bubble.
...
Joe ends up declaring bankruptcy, so the house goes back to the bank. the houses value is now $350,000. the bank looses $150,000 (i.e. the money literally disappears)
The person who sold the house to Joe got those $150,000 (or at least part of it, if they sold for a profit).
what did that person do with that money?
Not all of them spent it.
Some (many) invest it wisely or have it available in some bank account.
The money is there.
Joe lost.
The bank (or whoever bought the paper) lost.
the one who sold to Joe in the first place made some. That is the money I'm looking for.
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