Billionaire investor George Soros said Wednesday that global losses are likely to surpass $1 trillion from the subprime mortgage debt crisis, which he called the most severe since the Great Depression of the 1930s. “Losses being recognized now amount to $1 trillion” from the subprime mortgage debt crisis, Soros replied when asked about a similar estimate from the International Monetary Fund (IMF). “I think that is a fair estimate, but that number is likely to still grow,” as home prices in some countries including the United States continue face severe pressure and sometimes lose value, Soros told reporters. Soros was answering questions from journalists on a conference telephone call to discuss his latest book, “The New Paradigm for Financial Markets: The Credit Crisis of 2008 and What It Means.” “Certainly, the regulators have failed, for instance, to regulate the mortgage market,” Soros said. He also discussed foreign exchange, saying, “Central banks' willingness to hold [U.S.] dollars has diminished.” Soros added that the “acute” phase of the financial crisis may be over with the collapse of Bear Stearns, but warned that he expects there will be an impact of the credit-market crisis on economies. Global economies are in a period of rapid de-leveraging, and that will keep financial markets volatile, Soros said. “We are in a period of financial wealth destruction … and now we have de-leveraging,” he said, adding that the situation will lead investors to preserve capital.
