Is the exposure the DIFFERENCE between the loan amounts and the asset values? In this case $384 billion?
“Is the exposure the DIFFERENCE between the loan amounts and the asset values? In this case $384 billion?”
The exposure also includes the securities that are derived from the original debt, very leveraged, multiple of 12-30 times the original debt exposure.
If 8% of the $12 Trillion worth of mortgages in the US go into foreclosure and are sold at 60% of the original loan value, lenders will be on the hook for $576 Billion.
That’s what I meant.