Bernarn Madoff has recently hit the headlines with the collapse of his Ponzi Scheme, masquerading as a sound investment within his company, BM Investment Securities LLC venture, and resulting in the disappearance of $50 billion+. This, however, is mere chicken-feed when set against the losses arising from the housing market fraud. One could argue that this was not a Ponzi Scheme in the true sense, but as this market was based on the premise of incredible year-on-year returns, and could only survive as long as there was a continuous supply of new investors into the market, it sure looks remarkably similar. The effects are remarkably similar too, but even more pronounced as they hit all segments of the market, from those in modest flats, all the way up to the super-prime market, and sweeping up those suckers from the but-to-fret market too. Capital (house values) has dissipated overnight, and will erode further over the next couple of years, with virtually no chance of a return to 2007 valuations for a considerable period of time, if ever. Why - because the 'money' that fed the great house-price sham was created through fractional reserve banking, a system that lent 'money' that did not exist, and a system that will surely disappear without trace as (central) banks return to more traditional banking. Simultaneously, those foolish enough to withdraw equity from their property to fund current expenditure now find themselves caught in a triple whammy - diminishing capital, increasingly expensive debt, and the dawning realisation that they have merely brought forward future expenditure in order to fund a desire to 'have it all now' whilst maintaining an illusion of wealth and prosperity. The home-based buy to fretters are also being squeezed on all sides - diminishing capital, pressure on LTV, diminishing rental returns, expensive debt, and extremely illiquid assets. Those who brought abroad have all this too, but with the additional problems of euro-denominated mortgages funded with Sterling, the reduced number of potential buyers due to the fact that much of this overseas market is in property that simply does not appeal to the local population, and a huge reduction in low-cost flights resulting in fewer potential victims on which to offload their property or to whom they can rent out their property. So, is it all a scam or is it merely a case of bah humbug on my part?