... gone bust and the bank now owns the home. But the loan was for $588,000, and the house is worth $538,000. If lots of home loans go the way of Hanna’s loan, then the total value of the bank’s ... hereafter.Financial Markets as a Source of Instability • 45 And in the real world, people go off the deep end, with painful regularity. Our framework for thinking about risk and the economy,therefore, ... figure out the general pattern of the investment cycle that definestheir world. In this Never Never Land, how would the ups and downs of the financial world compare with the real economy boom and bustcycle?Financiers,...