Thanks for the clarification. Quite a few descriptions of CDOs have mentioned commercial real estate, so I didn’t want to be double counting losses (this site has been making noises about CDO losses). Your factoid, of course, makes the impact of the CRE losses greater.

I have no hard data to back this up by, but CDO’s on CRE was a fairly new development and there were only a handful of deals done since the end of last year, so CRE losses via CDOs should be significantly below those of regular ABS (relative to total outstandings).

Ah, but keep in mind these losses are not all at Citi. We have poor chump banks and funds all over the world who own this paper!

I remember talking several times with a former Fed economist, now head of a very successful hedge fund (and this guy is well into his 60s, so he has seen a lot of bad markets). He didn’t regard the prospect of what was then estimated to be $170 billion in subprime losses as a big deal. Its effect would have been to knock 1% off GDP growth.

But $100 billion on top of say, $250 billion in subprime losses, plus CDO losses that could conceivably exceed subprime, well then you are talking real money.

$150 billion? That’s just a bit shy of Citi’s remaining market cap. But we’re at the point where that’s now dismissed as a “smaller” problem?

Strange days.