Man Made Black hole worth $400b+

US subprime market is a big big man made black hole that was built at a cost of $400b+...a marvelous structure indeed. I dont know why professional people got sucked into that or is it that they are sucking the govt out by showing losses on balance sheet and trying to get tax rebates and restructuring loans? or is it that its THE ONLY WAY to hike up the rates and bring in stricter control needed to get the credit line in. My take on this well laid out plot is that banks and financial instt were tracking down on how many defaults happens and how much they would lose. As of now the rise in defaulting has hit 300% which is a sort of bad news to the rich banks, so only way to turn around is orchestrate a plot so as to deny credits to many, take rebates by showing losses and finally doing this thing "Baking the cake and eating it too at other's cost"....meaning they have locked up the lands, they show the losses and they can go for the kill later by up-ing the supply when the demands are the same.

The fact that it may have happened genuine stands at the probability of 0.1. Let me explain what could happen when you view this way....

Fig 1 shows Demand D1 and Supply S1 and its operating at the equilibrium point, now some rogue entities try to offer incentives or throw away money so that some people may suck that up, so what happens now is people have money so they push the demand up. Now new demand is D2. Now the equilibrium point adjusts itself at a higher position where real estate guys are calling the shots, the suckers are taking the bait and increasing demand. The freebie wont go on for ever, so what happens now is that gasoline prices shoots, food prices shoot, the people get pink slips. This translates to defaults to mortage companies, these companies raise a red flag and seize the property and try to make a kill by asking for selling price or current market price. As many suckers get sucked up, many houses are up for stakes, so in reality the supply still is the same but the demands have dipped in. This situation is called flooding and no one wants to buy at the current market price, so as a bait these financial instt do a marginal discounts and still there are hardly any buyers and technically they must move to lower equilibrium point, but the thing is...it may be lower than the cost price+interests and they are smart enough not to give out at dirt cheap and go into red. Take-2 .... they create the notion of too many houses, too few buyers and they are losing money, lost money and will write off losses. Even if they write off losses, they wont gift this house to original buyer...on the contrary they will sell it to rich dudes who will hoard it and go for a kill once the news goes stale and the demand increases again. The point here is that demand curve wont hit rock bottom on one day when you wake up. It may be going down and if the smart bankers dont see that then they have gone pretty lazy and must be replaced....so that leaves with the possibility that it may be orcestrated pretty well !!!
Now its for you to decide on this one!!!!!!!