How fun is this housing crisis?

So, it'll be longer than expected before it's safe to go back in the water. Turns out, we're not even halfway through this thing. The sub-prime market, fingered as the cause of our current housing crises, is just the beginning and may pale in comparison when we look at the upcoming adjustments in Alt-A and option ARM loans. It's estimated that the sub-prime debacle has created over $1 trillion in defaults and and losses totaling $7.7 trillion, according to Moody's Economy.com, of the world's market capitalization since the October peak. Alt-A and option ARM loans, which will begin to adjust on a large scale sometime in 2009, could cause an additional $1.6 trillion in defaults over the next three years.

Alt-A loans (Alternative A paper) are loans that are less risky than subprime loans, but certain characteristics - like high debt-to-income ratios or high loan-to-value ratios - keep these loans from conforming as Fannie Mae or Freddie Mac mortgages. Option ARM loans offer low initial interest rates, teaser rates as they've been called, which reset in as few as two years. Most of these types of loans were written in 2005 - 2007, and default rates on them are already untypically high due to current economic conditions.

Can't exactly say it'll be fun to watch, but watch we will.