Rantings and tirades of a frustrated economist.
The dislocation could have significant impact. However, it is important to remember that a loan does not by itself create wealth - it is a temporary transfer of possession. The failure to repay a loan does not destroy wealth - it is a transfer of that wealth.So the subprime meltdown is a big wealth transfer from lenders/investors to borrowers (or to the parties to whom they spent the borrowed funds). The wealth is still out there somewhere.
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