What Wall Street, Treasury, and the Fed are Afraid to Admit

Now here is what all those Wall Street analysts and CNBC morons are trying to figure out but can’t seem to correlate the data well enough to put a calculator and some logic to the problem. The question is this - how much of that $11 trillion dollar mortgage trigger is going to vanish and then how much of it will come in contact with the $57 trillion dollar CDS firing-cap? As I have said since before I sold my own real estate holdings in 2006 - real estate values across the US will adjust to pre-bubble prices, as in pre-1999 levels, which is when sub-prime lending and loose monetary policy greased up the skids for this whole barn-dance to get underway. So, if US real estate prices nearly doubled during the barn-dance bubble, guess what? Their values will now be cut in half. Note - the increase on the Case-Shiller index was approximately 83% from about 1997 to market peak. While I’ve used this Case-Shiller history of home values graph before - here it is again. It is after all the best depiction of how we got to where we are today.