Deutsche Bank predicts subprime losses at $300-400 billion worldwide

You haven't seen anything yet. Deutsche Bank analysts believe that losses from the falling value of subprime mortgage assets could soar as high as $300 billion to $400 billion worldwide, according to Bloomberg today. Mike Mayo, a New York based analyst, believes Wall Street's largest banks will be forced to write down as much as $130 billion because of subprime related debt. About $1.2 trillion of the $10 trillion of outstanding U.S. home loans are subprime, according to Mayo.

Deutsche Bank expects 30% to 40% of subprime debt to default, Bloomberg reports. Mayo thinks that losses on subprime loans to people with poor credit histories may be as much as half the total lent. He thinks banks and brokers will have to write off $60 billion to $75 billion this year. His estimate is based on known charges of $43 billion and an expected $25 billion not yet announced. Deutsche Bank writedowns are expected to be about $3.15 billion this quarter. He expects writedowns from HSBC Holdings Plc (NYSE: HBC), UBS AG (NYSE: UBS) Bank of Scotland, and Barclays (NYSE: BCS) to be around $5 billion each.

Deutsche Bank plans to hold a conference call on Nov. 15, so we'll have to wait until that time for more details.

Lita Epstein has written more than 20 books including the "Complete Idiot's Guide to the Federal Reserve" and "The 250 Questions You Should Ask to Avoid Foreclosure.