Small wonder that when the sub prime market blew up, these markets also froze.

Moreover, the US housing market appears to be stabilizing....Overall, the US mortgage market has remained resilient, although the sub prime segment has deteriorated a bit more rapidly than had been expected.

A year ago, however, with the subprime mortgage meltdown of August 2007, I became certain.

The housing recession the worst in US history and worsening every day will eventually see house prices fall by more than 20 , with millions of Americans losing their homes.

So far, the sub prime crisis has had a limited direct impact on Latin America s mortgage markets.

This brings us back to the US Treasury s plan to spend hundreds of billions of dollars to unclog the sub prime mortgage market.

The problem was not just sub prime mortgages.

The fact is that the European economy has been affected more by sub prime mortgages in the United States than by a carbon price in Europe.

Losses are spreading from sub prime to near prime and prime mortgages, commercial mortgages, and unsecured consumer credit (credit cards, auto loans, student loans).

Around sixty sub prime lenders have already gone bankrupt.

The entire sub prime market is largely a decade old innovation the word sub prime did not exist in any language before 1994 built on such things as option adjustable rate mortgages (option ARM s), new kinds of collateralized debt obligations, and structured investment vehicles.

After the subprime crisis erupted, mortgage and consumer debt was paid down by households either with their savings or by default.

Sub prime mortgages made the American dream come true.

The sub prime crisis has exposed serious problems that we must address.

In this way, the Fed contributed to creating the sub prime crisis.

But it is the economic slowdown that renders all developed countries less resistant to the financial shocks resulting from the sub prime problem and from the mixed loan packages that are then used to dilute the risks attached to sub prime debt.

The state is an epicenter of the housing bust and the foreclosure crisis.

This, of course, is just the story of subprime mortgages in another guise.

Its members could not agree even on how to define subprime mortgages and calculate how many such mortgages there were in the United States at the time of the crisis.

The largest number of defaults on sub prime mortgages will occur this spring.

Gambling by Main Street caused the sub prime crisis.

It is that their economies could be dragged into much deeper crises than those that will be experienced at the epicenter of the sub prime debacle.

But, in America s home mortgage market, this is much less common.

Americans don t seem to realize that their sub prime mortgage meltdown has all too much in common with many previous post 1945 banking crises throughout the world.

After all, when the global financial crisis erupted in 2008 from the bowels of the American subprime mortgage market, global investors responded by fleeing to the US, not from it.

Everybody now knows about America s dodgy sub prime mortgages (the term says it all).

In America in the wake of the sub prime mortgage crisis, it has done neither.

Hot money moves out of the sub prime market into food and other commodities, and suddenly poor city dwellers in the Philippines, Peru, and Cote d Ivoire are faced with terrible hunger.

In August 2007, some German banks, at the earliest signs of difficulty because of their exposure to US sub prime mortgages, started to talk only of 1931.

The dangers of failing at this task have been made painfully clear in the sub prime mortgage debacle.

But that is precisely why a government managed mortgage market is dangerous.

After financial implosions, such as the collapse of the dot com bubble in 2000 or the sub prime meltdown of 2007 8, such views appear arrogant.

What started with subprime mortgages spread to all collateralized debt obligations, endangered municipal and mortgage insurance and reinsurance companies and threatened to unravel the multi trillion dollar credit default swap market.

Long before the emergence of the sub prime mortgage problem, Citigroup was damaged by the behavior of its London traders, who tried to manipulate the European government bond market, and by its Tokyo traders.

It is worth remembering that the same thing happened in August 2007, when the sub prime crisis erupted.

After the sub prime mortgage crisis, politicians alleged that the market was short sighted and irrational, and rushed to propose new regulations.

The sub prime sector in the United States was hit, and the financial crisis spread from there.

The fundamental question today is who monitors opaque loans, whether of the sub prime or any other variety.

Such a statement would have been unthinkable in the years before the sub prime mortgage meltdown.

Credit risk in the mortgage market is being assumed by the government, and market risk by the Fed.

US banks finance up to 100 of a house s value, sometimes even more, and the sub prime market even includes loans to people without jobs and income.

In Mexico, the market for new low and middle income housing has grown rapidly, thanks to the creation of a market for residential mortgage securities in 2003.

The sub prime mortgage crisis has shown how lack of international coordination and regulation can exacerbate the inherent fragility of financial markets.

One sure way to reduce the savings rate in China would be to develop an American style mortgage market there.

At that time, the consensus among economists and policymakers was that these estimates were exaggerated, because it was believed that sub prime mortgage losses totaled only about 200 billion.