Total outstanding adjustable-rate subprime mortgages are less than USD 1 trillion. Moreover, those mortgages originated during 2006 and early 2007 represent only a fraction of that total. Thus, even if subprime delinquency rates keep climbing to unprecedented levels, it seems likely that total losses will be roughly in a range of USD 100-200 billion. Although this is a lot of money, it pales next to the USD 58 trillion of net worth of US households or the USD 16 trillion market capitalization of the US equity market. To put these losses in perspective, a 1 percent gain or loss in the.
