Egypt News

Alan Greenspan has remarked that there is a one-in-three chance of recession from the fallout. Nouriel Roubini, a professor at New York University and head of Roubini Global Economics, has said that if the economy slips into recession "then you have a systemic banking crisis like we haven't had since the 1930s".
The Associated Press described the current climate of the market on 13 August 2007, as one where investors were waiting for "the next shoe to drop" as problems from "an overheated housing market and an overextended consumer" are "just beginning to emerge." MarketWatch has cited several economic analysts with Stifel Nicolaus claiming that the problem mortgages are not limited to the subprime niche saying "the rapidly increasing scope and depth of the problems in the mortgage market suggest that the entire sector has plunged into a downward spiral similar to the subprime woes whereby each negative development feeds further deterioration", calling it a "vicious cycle" and adding that they "continue to believe conditions will get worse".
As of 22 November 2007, analysts at a leading investment bank estimated losses on subprime CDO would be approximately U.S. $148 billion.
As of 22 December 2007, a leading business periodical estimated subprime defaults between U.S. $200–300 billion. As of 1 March 2008 analysts from three large financial institutions estimated the impact would be between U.S. $350–600 billion.
On 20 March 2008, the Organization for Economic Cooperation and Development downgraded its economic forecasts for the United States, the Eurozone and Japan for the first half of 2008.
Because of the global economy, and the huge subprime "pool" of mortgages that was bought by investors world wide, the International Monetary Fund (IMF) "says that the worldwide losses stemming from the US subprime mortgage crisis could run to $945 billion."
Francis Fukuyama has argued that the crisis represents the end of Reagnism, which was characterized by lighter regulation, pared-back government, and lower taxes. Significant regulatory changes are expected as a result of the crisis.
Alan Greenspan, the former Chairman of the Federal Reserve, stated:
"The current credit crisis will come to an end when the overhang of inventories of newly built homes is largely liquidated, and home price deflation comes to an end. That will stabilize the now-uncertain value of the home equity that acts as a buffer for all home mortgages, but most importantly for those held as collateral for residential mortgage-backed securities. Very large losses will, no doubt, be taken as a consequence of the crisis. But after a period of protracted adjustment, the U.S. economy, and the world economy more generally, will be able to get back to business."

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