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:

Continue reading Will subprime meltdown cost $4 trillion, $400 billion, or $104 billion?

Will subprime meltdown cost $4 trillion, $400 billion, or $104 billion? originally appeared on BloggingStocks on Fri, 26 Oct 2007 13:25:00 EST. Please see our terms for use of feeds.