Nonsense. What happened was that the government, and the smart asset holders, merely waited for property values to return-—which they did, as they always do-—and an “$800 billion” problem became half that, or less. It was no different in the Panic of 1837: people who got antsy and sold or foreclosed lost money; those who were patient made money.
Just for yucks, I took a rare visit to the economic and financial experts at Daily Kos to see what they are saying.
http://www.dailykos.com/story/2007/8/10/75050/4324
Alot of “end of the world” stuff, as usual, with one idiot even starting off by saying the dollar is pegged to gold.
Markets go up, markets go down. Foolish investors may make money for a while, drawing in more foolish investors. Just the names and products change...