"There are $1 trillion in outstanding subprime mortgages, with potential losses estimated at about $250 billion" yeah
Look what a US taxpayer can do to harm its own country. The consumer shunned all aspects of home ownership and refused to participate in the real estate market as if its a millstone around his neck, causing devaluations and the dominoes effect nearly killed us all...
US consumer is playing like a child in a temper tantrum. While his country goes to dogs threatning his own job, he is steadfastly deluded he can buy real estate on the cheap ( if he can get credit from those who have gone out of business or will not be there anymore) to service his red bottomed ass.
US Consumer's refusal to home ownership, is the cause of this potentially lethal disease. Now that itself has migrated to threaten the well being of our citizens. He is acting like a man-child, steadfastly deluded and still stubborn and nasty when the temple is about to go bust!
Those in debt will have to pay for years to come. Those holding the bags are paying interest plus enormous property tax
Eventually it will work out to zero sum, actually greater than zero sum, the FRB will just print more money to make up for the credit crunch. As money is lost in the markets, deflation should occur but since the FRB is keen to keeping GDP positive they'll continue to issue credit/print money.
There is $1 trillion in subprime mortgages, true, but it won't cost the full trillion. Only if nobody, not even a single family paid their subprime mortgage.