The fact that there we huge losses all over is obvious. Who profited from all this?
A few investors took short positions on the housing market, but for the most part, everybody lost.
I asked this a while ago. From what I can remember from that thread, it was everybody who made money on fake value (e.g. sellers) but didn’t put it back into the market.
For example: Land is purchased for 200k. It rises to 400k, then sold. The person who bought it for 400k walks away from the land when the value goes to 250k. The original seller pocketed the 200k, the bank is left holding the bag when the buyer walks away, minus the payments that the buyer made up to that point. The buyer loses on any payments made. If the original seller re-invests and buys say a 600k parcel, then everybody loses.
That’s basically it; generally, the only way to profit from a falling market is to cash out before it falls. Hedge fund managers Paulson & Co., profited hugely from shorting on mortgages by selling subprime CDOs, and continues to do well, presumably at the expense of the optimistic and those who haven’t learned the lesson.
Also, see the book The Big Short. A very informative and interesting read about just this subject.
J.
Anyone involved in the house-building industry that managed not to be overextended when it crashed… People in the building trades who were steadily employed, often at premium wages with lots of overtime. Anyone who has ended up with an expensive house then got the bank to recognize the problem and renegotiate their mortgage downward. (Did that really happen to anyone?) Anyone who saw the (should have been) obvious and took their money out of the stock market in time.
People who collected bonuses for pushing mortgages out to anyone and everyone, and the bankers who collected big bonuses for selling manure as gold - and then collected added bonuses for making sure their bailout succeeded.
Basically there was a river of money flowing along, and many dipped their buckets in for share.
Continuing the metaphor … And those people who bet that the river would run wider and wider forever or who depended on the wide river for their basic livelihood got burned when the drought came. Those people who believe that the river will dry up permanently are going to be surprised when the spring rains come.
All this is true, but I wonder whether the OP is asking, as I rather naively wondered, “All these companies have lost billions, so someone must have made billions - who was that?”
The answer to that question is really “no one”, because there is now simply less wealth around than there was (or at least, the money everyone was trading never really existed).