I gave this 3 trillion - back in Dec. 07. If you factor in layoffs, general price increases, economic slowdown and the rest of the damage - I won't even venture a guess. The 3 trillion is singular and housing related, i.e. single family,condo and shopping center construction. I also pointed out that this really beyond bail out as the cost is so high that it will bankrupt the U.S. government.
I repeat that is seven months ago.
Yes, I did try my elected representatives and at least the one that has my district is a believer, to bad he is a minority. He can't get a damn thing done either.
We the people, have a serious problem. It seems that we have managed to send a large amount of one of our lower anatomical parts to Washington.
If this were bottom, we could breath a sigh of relief, but the bottom is a long way off. I feel a great deal of sorrow for the working middle class that had nothing to do with this adventure into the world of greed. I feel sorry for those on fixed income that were squeaking by, staying off government assistance because they still had pride.
I feel sorry for those that are going to find ways of heating this winter that they never considered.
I do not feel sorry for those in banking, building and real estate that brought this about, although they will suffer too. I have nothing but disgust for those in Congress that let this happen and I do hope that someone is compiling a list of all the members of the House and Senate finance committees.
I hope that list makes all of the media.

Who made the 8 trillion,if America lost it?

IT DOESN'T PHASE ME.IT'S ALL A SHADE OF GRAY NOW.IT 'S PLAY (MONOPOLY) MONEY.THE LITTLE PEOPLE BAILED OUT S&L A FEW YEARS AGO.THERE'S NO DEBT WE CAN'T HANDLE.BRING IT ON!

We do a have problem. On the bright side of this the population growth and the old adage: Their not making any more land .Will ballance the scales,sooner then we may think.Remember this is REAL estate not tulips.( hundreds of years ago there was a bubble in the price of tulips ,often quoted as the bench mark for economic Bubbles) Stay optimistic ,cool heads and clear thinking will prevail .We just have to start picking up the pieces together.

give it up peter you been writing this b. s. forever all you are doing is causing panic for the common investor.you must be one of the people shorting the fnm and fre stocks.why don't you grow some gonads and start buying these stocks and stop your writing these endless blogs before someone reports you for spreading false rumors before the sec comes down on you.

A few thoughts to ponder.

1) The exposure is not eight trillion or anything close. The exposure is the total sum of the defaults plus operational costs, whatever that is.

2) If lenders were allowed to collapse then investors like myself might be buying the loans at some discount depending on the quality. That would vary. Some mortgages might receive 50 cents on the dollar but the vast majority of performing loans would be worth 75% to 85% on the dollar.

3) This reminds me of the guy that asks what happens if the bank that owns my loan goes bankrupt do I still owe the money...

only from a novice...the obligation remains, the party it is paid to changes.

4) Under normal circumstances less than 2% of loans might default. We have heard the rate of defaults is up 100%, even 200% and in some cases more. However, a 500% default rate would only be 10% of a portfolio. But then you get the property which in a dire situation might be worth 50% less so the average portfolio loss might still be 5% of the portfolio.

5) Now that is still serious. 5% of $8 trillion, if that's the number is $400 billion and thats a lot.

6) One last point. A lot of the money we talk about losing is a phantom, it never existed in the first place. We were all pretending the nations equity had ballooned so much. In the end, when it disappears it will be closer to normal. The tragedy is that the winners and losers ultimately will not be equitable or fair. Not when you look at the billions Wall Street managers skimmed off the top leaving shareholders and tax payers with the bill.

Sheldon L: Exactly. I've learned over time that these guys that blog stocks know very little about economics, stocks, or money. If a bubble deflates, the system is going down to normal. The "nation's equity" is not losing money because that value was really never there to begin with. The Feds have no choice but to bail out certain banks and institutions. It isn't about fairness, it is about not allowing the problem to spread or avalanche out of control. We the taxpayers get to foot the bill. If Wall Street was drunk, it was the government and the Fed who provided the alcohol!

You wrote: "But that cost dwarfs what the collapse of the real estate market might cost our country in total..."

Perhaps you meant - "But that cost is dwarfed by what the collapse..."

I do not think the government should bail out people and businesses that make bad investments. I lost 50 grand back in the 80's and I did what they should do chew up and swallow your mistakes. I was fortunate though because i was still relativey young and healthy (mid 50s) and I did then as I do now, always have an ace in the whole. I am 75 and I have never even been close to bankruptcy and I never will but dropping 50 grand hurt. It has a lot to do with Charlie Keating which McCain was an important player in that scheme as well as his wife Cindy and her father.

Remember our elected officials are suppose to be the watch dogs but it's taking on the smell that they are more like a fox guarding the hen house. The Bush administration slept right through this whole scheme or did they? Bush and Cheney went into office millionaires. Anyone want to bet against there are both now billionaires? No, thier ill got money is not in our banks because they are too risky and only insure 100 grand, peanuts to them.

David...

Thanks for your support, however, I am one of the stockbloggers.

I look at GOD for my daily rice & beans !

Our government has failed AMERICA !

Where is this new BEEF? All I see and hear is the same old BULL still walking around !

What goes up MUST come down. Simple universal law that applies to even to the so called "capitalist economy" of USA. (Come to think of it, USA has a recession about every 10-12 years when it supposedly "sobers up"-besides the point right now)
As the previous posters already pointed out, there wont be any 8 trillionS lost because they weren't there to begin with. Monopoly money courtesy of Greenspan created out of thin air. Now the government will be "bailing out" its pals but only from certain banks thank you very much.
And they still call it capitalism. Who was it that said modern life is beyond satire? Thank goddess I wised up and sold my house in 2004 a year before the crash came in. I knew the party will end one day.. Hey, maybe I should teach economics at Harvard or some of them places, I guess I'm a better economist than all them put together.

This one has to be a early favorite in the Dumbest Scaremongering Headline of the Year Award...Since the entire US Housing market is worth about 10 Trillion a 8 Trillion write-off would mean 80% of homes nationwide would have to be in Foreclosure...Sheese, send this moron back to 'Muffler King' where you found him...