Back in the day, Jesus was able to feed a multitude with little more than a few fish and a loaf of bread. Unfortunately, bankers are unable to work such miracles with their funds and their legions of clients.
There's not enough money to go around. It was all lent out. Some of those who borrowed couldn't pay it back, and the banks had to take a loss. They had even less money to loan, and they couldn't borrow from anyone else because everyone had too little money. No loaves and fishes-like scenario when it came to cash.
The U.S. Treasury has all the money, and they'll be doling it out to those who thought the party would go on forever. People too poor to afford their mortgages aren't going to be in any better shape, but the source of their financing is going to get help so that they can lend another day.
Over in Europe, Fortis has been taken over by the Belgium, Luxembourg and Netherlands governments to avert a total collapse. In England, Bradford & Bingley has joined the list of the newly nationalized. Germany's Hypo Real Estate has cut a deal to avoid collapse, but that's only resulted in a 75% drop in the company's value.
There's not enough money to go around and the banks won't lend to one another because there's no little bit extra left in the vault to share.
All over the world, property was worth a lot and the value just kept going up. Why not hop on the gravy train, went the logic, but the train has ground to a halt.
The same thing happened in the United States following the Civil War, back around 1873. Everyone was speculating in property, buying with the notion that the property could be flipped and you'd get rich quick. Didn't work then. Didn't work this time either.
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