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To discover just how much more pain is ahead for the subprime industry (and all those CDO holders) let\'s turn to the Quarterly Data Report.
According to the QDR, since the first quarter of 2005 mortgage bankers of all stripes (insured depositories among them) have funded $1.645 trillion in subprime loans.
Most of these loans, presumably, have been securitized. To date, Wall Street firms and banks have written down the value of their securities and CDOs by $100 billion or just 6.07% of the loans funded in those years.
The big question is how much farther do we have to go? Let\'s assume the actual losses on the $1.645 trillion are 10%. That\'s $164.5 billion. So, if to date, the losses are $100 billion that means we have $64 billion to go |
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