Credit Crunch

18% of economists who responded to a survey by the National Association for Business Economics, put the probability of a recession starting within the next 12 months at 50% or greater. That's up from the 11% of economists who said so in August.

In a recession, investors have to be prepared to absorb a 20%, or more, decline in the value of their portfolios.

Home-equity withdrawals accounted for up to $324 billion a year in consumer spending from 2004 to 2006, according to estimates from a Federal Reserve economist. These withdrawals and related consumer spending plunged in the first half of this year. By the time the housing slump bottoms out, $1.7 trillion in housing wealth will have been lost. For each dollar that a home falls in value, consumer spending falls by 4-9 cents, Fed Chairman Ben Bernanke told Congress.

• January 2003 6.03 million existing home sales
• June 2003 The Federal reserve cuts the benchmark federal funds rate for the 13th time in 30 months, to 1%, the lowest since 1958.
• June 2004 The Federal reserve begins raising interest rates, 17 times in 24 months to 5.25%, the highest since early 2001.
• July 2004 Homeownership hits a record 69% of US households, 73 million Americans owning their own home
• September 2005 The Peak, 7.21 million existing home sales
• September 2007 Projected, 5.04 million existing home sales

Total non-conforming (loans that do not meet Fannie Mae's or Freddie Mac's standards for purchase) mortgage market, during the 2nd quarter of each year:

• 2003 $718 billion
• 2004 $825 billion
• 2005 $1.4 trillion
• 2006 $2.0 trillion
• 2007 $2.4 trillion

Leading banks to write down billions on securities, 7 banks, $31 billion in write-downs: Citigroup $13.7, Merrill Lynch $8.4, Morgan Stanley $4.6, JP Morgan Chase $1.6, Goldman Sachs $1.5, Lehman Bros $0.7, Bear Stearns $0.7.

According to Zillow.com, almost 16% of homeowners who bought in the past two years owe more on their mortgage than their properties are worth.