All Annotations of Marginal Revolution: Subprime fact of the day[Preview]

saved byBrian Dowling on 2008-02-18

• Subprime fact of the day

  
  
  
  

  The entire market in subprime debt is just 1.4% of the size of global equity markets. Or, to put it another way, a 1.4% downward fluctuation in stocks erases the same amount of value as if all subprime-backed bonds were collectively marked to $0.

  • on 2008-02-18 Brianddrpm
    This is another look back comparing then and now.  Is it possible that libertarian conservative economists have a tendency to be overly optimistic about capital markets?  The argument is that the subprime issue is not that big of a problem. 
    Perhaps by its self but as part of the credit crunch problem it seems to be the last straw on the camel.  One of the Marginal Revolution readers points here for a rebuttal. 
    Currently the subprime issue has spilled over into the commerical retail market so either it had more impact than appreciated back then or psychology plays a far larger role than I ever appreciated.