SAN FRANCISCO -- Call it the trillion dollar question: When will housing markets turn? Experts like PIMCO managing director Bill Gross say that when all is said and done, the lending and finance industry could tally up $1 trillion in cumulative losses in the housing downturn. Because banks and other lenders need to maintain about $1 in capital for every $10 they lend, that could translate into a $10 trillion contraction in borrowing, said Patrick Stone, chairman of The Stone Group, during a panel discussion at the Real Estate Connect conference. Considering that U.S. gross domestic product (GDP) is around $13 trillion, the impact on the economy could be "very severe," Stone said. The credit crunch is like a guillotine hanging over the economy’s head, and with dozens o...
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