According to Deutsche Bank’s Mike Mayo:
Currently, of the $10 trillion in U.S. home mortgages, some $1.2 trillion may be regarded as subprime...
This is very interesting to me as it affects the economy. Many large banks and brokerage firms are announcing major write-offs of billions of dollars of bad debt on mortgages but the totals are amounting to less than $120 billion for all of them. Maybe it amounts to twice this at $250 billion when all is told ($8 billion here, $1.1 billion there, etc.) but, as you can see, numbers are deceiving because the totals are so big. I encourage you to keep perspective.
The good news is that the possible $150-$250 billion is spread amongst many institutions rather than just one (like Long-Term Capital back in 1998) and the total is only 1.5% to maybe 2.5% of the total mortgage market. That is not far from historical averages.
It is still bad because real people are losing their real homes and also because of the psychological effects (the fear/greed syndrome), but the reality is not beyond reason.
An Introduction
Hi. Welcome to BourGroup and my blog. Phil
Phil Bour is a CERTIFIED FINANCIAL PLANNER(tm) professional since 2004, a Magna Cum Laude college graduate and an accounting professional for over 35+ years. I love numbers, statistics and economic history.
I am also an Enrolled Agent (EA) to represent taxpayers before the Internal Revenue Service and to prepare tax returns.
"Phil"osophy: I believe that you can manage your money on your own (not necessarily through individual stock selection but through mutual funds, ETF's and other solutions) once you receive some one-time, professional guidance. Why pay annual fees when there may be little added value? For additional information, first read the "An Introduction" label at the left. Then move on to others.
Phil Bour is a CERTIFIED FINANCIAL PLANNER(tm) professional since 2004, a Magna Cum Laude college graduate and an accounting professional for over 35+ years. I love numbers, statistics and economic history.
I am also an Enrolled Agent (EA) to represent taxpayers before the Internal Revenue Service and to prepare tax returns.
"Phil"osophy: I believe that you can manage your money on your own (not necessarily through individual stock selection but through mutual funds, ETF's and other solutions) once you receive some one-time, professional guidance. Why pay annual fees when there may be little added value? For additional information, first read the "An Introduction" label at the left. Then move on to others.