Subprime could cost 1 Trillion Dollars

[DeeDeeTwo]

Quote from Thermactor:

"There are $1 trillion in outstanding subprime mortgages, with potential losses estimated at about $250 billion"

yeah

US GDP is about 14,000 billion...
So total losses are 1.7% of ONE YEAR of economic output...
And probably about 50% of those losses are to foreign investors...
So that's < 1% of one year spread over 3 yaers...
So that's 1/3 of 1% for 3 years.

Big Freaking Deal.

People fueling the HYSTERIA about subprime...
Are basically saying that a few homeless people...
Are gonna bring down the US economy.

 

[jrcase]

Quote from crgarcia:

There is $1 trillion in subprime mortgages, true, but it won't cost the full trillion.

Only if nobody, not even a single family paid their subprime mortgage.

"The amount of debt that's likely to go bad is virtually certain to be in the high hundreds of billions of dollars, and it wouldn't surprise me if it ends up crossing a trillion," said Baker.