Although many experts have stated that the housing crisis is worse than many thought, the IMF released data today that indicated global losses for poor credit mortgages may exceed $1 trillion. Although the crisis started in the subprime market, it has quickly spread to other aspects of the housing industry. Home values are dropping and more people with poor credit mortgages are finding it harder to make their payments.”What began being a credit shock in the subprime market is starting to spread,” said Jaime Caruana, director of the IMF’s monetary and capital markets department. “It is important to repair balance sheets, to boost capital, and it will be necessary also that central banks continue to provide liquidity to financial markets.”"This past year has been an incredibly turbulent time in the financial markets,” Morgan Stanley CEO John Mack said. “We’ve seen market disruptions and illiquidity that have impacted every firm in our industry—market conditions that are unlike anything I’ve seen in my 40 years on Wall Street.”"There is the basic problem that banks have been reluctant to post these write-downs,” said Michael Englund, the principal director at consultant Action Economics. “The market has gone from underappreciating risk to being hypersensitive to risk.”
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