US homeowners: 50 million
Number in foreclosure: 500,000
Est. Average Mortgage: $300,000 (being overly generous; well above nat'l avg.)
Est. Worst case Valuation Drop (avg drop is less than 20% from peak): 40%
Average valuation DROP/foreclosed home: $120,000
Multiplied by number of foreclosed homes: 500,000
Equals: $60 Billion.
Paulson's Asking for $700 Billion !
Believe me, a $300,000 dollar house, nearly brand new that is offered at $180,000 will sell. Hedge Funds would be formed simply to buy the homes.
Paulson is lying!! He is bailing out banks for bad derivative bets, commercial loans and investment in private equity funds!!! Guaranteed.
Btw, where is a summary like the above highlighting the "Sources" and "Uses" of Funds ($700B) like any M&A deal would disclose???
Our Congress is inept. They are not even asking for an itemization...
Great post. No wonder Bush administration is telling congress they need to act fast. They dont want people to figure out what you have figured out.
Doing the reverse math, they must have figured 700B/120k ie 6M homes will be in foreclosure when it is all over.
So which is worse, hiring Cheney to give money to big oil or hiring Paulson to give money to GS and others?