It looks like people in power are getting beyond the point of denying that subprime is a problem. And now they're onto the next stage of trying to decide just how big a problem it is. I have seen estimates ranging from as high as $4 trillion to as little as $104 billion. (This is one area where the son will beat the father. Bush I's Savings & Loan crisis cost $240 billion but Bush II's looks likely to be far more costly.)
While each estimate covers different aspects of the cost, the big questions that need to be answered are:
- What caused the problem?
- What can and should be done to minimize the damage? and
- What changes can be made to keep it from happening again?
I don't have real answers to these questions but I think a look at the different estimates of the subprime mortgage meltdown's damage can shed some light on the problem. Here's my take on the three estimates:
Cramer on BloggingStocks: Not much time left for downside 
Foreclosures fall, but are still higher than a year ago
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