catrabbit

Subprime Write-Downs More Than 50% Done? Write-Ups Coming Next?

Here are the flaws with your analysis:

The $285 billion loss thrown out by S&P is attributable to SUBPRIME. Now:

(1) do you really trust that S&P knows what they're talking about at this point?

(2) the $285 billion was revised up from $265 billion. So even if you trust S&P, who's to say the number won't be revised up again?

(3) As mentioned above, that number is associated with SUBPRIME losses only. Subprime is only the tip of the iceberg. What about Alt A Hybrid Arms, Option Arms, HELOC's, credit cards, auto loans, commercial loans, and even prime loans. Deliquencies and defaults are getting worse on all products and will only continue to do so for the next 2/3 years. Now I don't know where exactly where you get your other numbers from (the $600 billion put out by UBS for example), but most estimates I've read which range from $500 billion to even $1 trillion include all credit losses, not just subprime. The quicker we all get out of this 2007 mindset that this is only a "subprime" problem, the clearer the picture will become.