I was recently asked a simple question and I feel I don't really have a convincing answer:If everyone has lost out because of the sub-prime crisis, then who has actually won on the other side? I know there are some well know guys like Paulson who won big time by going short sub-prime but are these the only winners? Ok maybe the guys who put together the sub-prime CDOs and made off with big bonuses. More fundamentally if the banks alone lost nearly $2 trillion then who has benefited on the other side?Thanks!

You may like to read "The Big Short" by Michael Lewis. It will give you a partial answer.

QuoteOriginally posted by: longvegaI was recently asked a simple question and I feel I don't really have a convincing answer:If everyone has lost out because of the sub-prime crisis, then who has actually won on the other side? I know there are some well know guys like Paulson who won big time by going short sub-prime but are these the only winners? Ok maybe the guys who put together the sub-prime CDOs and made off with big bonuses. More fundamentally if the banks alone lost nearly $2 trillion then who has benefited on the other side?Thanks!Anyone involved in the so called "constructions circuit". From plumbers and brick makers to architects, lawyers, developers and realtors. They had a couple of decades of tremendous growth.

Simplified scheme which represents 'winner' can be explained as following. Assume that A issued assets and B holds these assets. There is a market that defines the price of the assets. Market defines asset price as 100 ₤ and N is open interest of assets. Next day these assets are trading at 70 ₤. Either one market in its capitalization and A , B lost their money. If A and B have cash 1000 ₤ which they can invest in assets. There is a chance that asset price will be next 110 ₤ in this case they observe 'economy, growth . If next asset price will be bellow 100 ₤ it can be called recession and bellow 70 ₤ can be called crisis. Printing primary currency could not boost economy it always leads to depreciation of the wealth for the AAA and to bankruptcies of others.

QuoteIf everyone has lost out because of the sub-prime crisis, then who has actually won on the other side? Iwas it a 'dumb' interview question?if everyone has lost out, how could there be anyone "on the other side" ?

QuoteOriginally posted by: edouardQuoteIf everyone has lost out because of the sub-prime crisis, then who has actually won on the other side? Iwas it a 'dumb' interview question?if everyone has lost out, how could there be anyone "on the other side" ? this situation differes from the common game or casino which is the games with 0 sum and therefore it might be a feeling of a paradox. market does not have a overall sum of 0.

QuoteOriginally posted by: listQuoteOriginally posted by: edouardQuoteIf everyone has lost out because of the sub-prime crisis, then who has actually won on the other side? Iwas it a 'dumb' interview question?if everyone has lost out, how could there be anyone "on the other side" ? this situation differes from the common game or casino which is the games with 0 sum and therefore it might be a feeling of a paradox. market does not have a overall sum of 0.i agree. institutionalist economics argue that an item with any given price doesn't bear the same value for the buyer and for the seller. if the actual value perceived by the buyer was equal to that perceived by the seller, no transaction would take place, they say. there is no zero-sum game.QuoteAnyone involved in the so called "constructions circuit". From plumbers and brick makers to architects, lawyers, developers and realtors. They had a couple of decades of tremendous growth.and, I think it's relevant to adopt a dynamic view of the situation, as Anthis suggest. And, one can add home buyers/borrowers to the list of the winners during those happy past years.

QuoteOriginally posted by: edouardif everyone has lost out, how could there be anyone "on the other side" ?We were having a beautiful Christmas at the farm of my fiance's family, when we woke up to discover that a wayward spark had burned the entire season's crop to the ground, leaving only embers. But of course Bill Gates is laughing all the way to the bank, as usual. Our misfortune pays for him to buy another chocolate bonbon box for his newest concubine.

Banks who else ..... from the bailout