Not to toss my hat into an FA convo, but while I appreciate the math of this NYT article, the idea that losses to the economy should be measured strictly as the losses due to subprime delinquencies seems kinda simplistic. I don't think anyone is viewing the subprime problems as THE problems, but merely as something that has potential to cause huge ripples, be it from hedge funds collapsing due to 10-1 leverage (which would, using the simple forms of math this article uses, increase losses to $340 billion or $670 billion), or from changes in consumer spending, or... or... or.... Ripples and waves are the issues here, if there are issues.
Again, I would agree that by itself, the subprime mortgage thang probably isn't a big problem, other than to those it directly impacts. But to view any one element "by itself" in the world today doesn't seem a very sound strategy, either. Or put another way, viewing the war in Iraq as costing some X where X is the approved Congressional budget for the war is certainly true on one hand, but might not truly measure the absolute cost.
Just my 2 cents in a billion dollar discussion. |
