Re: Shrinking Deficit vs. Sub-prime / CDO writedowns

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Posted by warren mosler (72.161.109.198) on 09:27:50 11/21/07

In Reply to: Re: Shrinking Deficit vs. Sub-prime / CDO writedowns posted by Ed Rombach

mark to market 'losses' maybe, but at the end of the day actually default losses will be relatively small, assuming the econ keeps growing at 1-2% which will happen if exports hold up

: : : Warren - Is it just a coincidence that the $250bn drop in the budget deficit roughly matches the lower end of the range for estimated writedowns of sub-prime / CDO assets in the pipeline?
: :
: : I think so- interesting thought!
: :
: : :
: : : Ed Rombach
: :
:
: So, on top of the $250bn there exists leverage of say 5 or 10 to 1, which implies aggregate losses into the neigborhood of $1-2.5 trillion.

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Subject:	Re: Shrinking Deficit vs. Sub-prime / CDO writedowns
Comments:	: mark to market 'losses' maybe, but at the end of the day actually default losses will be relatively small, assuming the econ keeps growing at 1-2% which will happen if exports hold up : : : : : : Warren - Is it just a coincidence that the $250bn drop in the budget deficit roughly matches the lower end of the range for estimated writedowns of sub-prime / CDO assets in the pipeline? : : : : : : I think so- interesting thought! : : : : : : : : : : : Ed Rombach : : : : : : : So, on top of the $250bn there exists leverage of say 5 or 10 to 1, which implies aggregate losses into the neigborhood of $1-2.5 trillion. :
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