![]() The world economy is exploding with growth. The value of the stocks listed in the United States is very roughly $15 trillion to $20 trillion. The total wealth of the United States is about $70 trillion. So now we are down to losses of about $33 billion to $34 billion. Of this amount, according to my friends in real estate, at least about half will be recovered in foreclosure. Of this amount, about 5% is actually in foreclosure, or about $67 billion. ![]() Of this, nearly 14% is delinquent, meaning late in payment or in foreclosure. Of that, a little over 13%, or about $1.35 trillion, is subprime - certainly a large sum. Here is the first instance in which proportion tells us that something is out of whack: The total mortgage market in the United States is roughly $10.4 trillion. First, when the story of this turbulence is reported, the usual explanation mainly has to do with some new loss in the subprime mortgage world. So, because I am an economist, among other duties, here is a little perspective on the recent turmoil in the stock and bond markets. "The job of an economist, among many other duties, is to put things into perspective. ![]() Action at the "periphery of the periphery." ![]()
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