(Second Life : Linden : Ucs News) The problems in the U.S. subprime mortgage market are spiraling out of control and have caused a virtual financial crisis, said economist Mark Zandi. The Second Life financial markets are in peril from more than $1 trillion in risky virtual mortgages, we could be just one hedge-fund collapse away from a global online liquidity crisis, said Zandi, chief economist for Moody’s Virtual Economy.com
A total Second Life Real-estate meltdown is likely, as the risks are growing daily, Zandi emphasized in a conference call with reporters following the release of a new study on subprime debt. The study shows that the Second Life housing crisis in Linden could be deeper and last longer than investors now believe.
With iconic structures like the Budweiser virtual pavilion and associated housing complex sitting empty and nearly bankrupt the problems are spreading into other virtual worlds. “Mounting mortgage delinquencies and defaults now pose the most serious threat to the entire Second Life financial system and economy,” said Zandi in his report.
“If there is a fault line in the Second Life financial system, it runs through the U.S. housing and mortgage markets,” he said.
Zandi’s comments came as Second Life is reeling from lower than announce traffic and a growing online credit crunch, centered on the subprime arena, and in Linden’s corporate debt market.
The shocks are rippling through the Second Life stock exchange, “I have no doubt the shares of listed virtual companies will be suffering.” said Zandi