Mr George Soros chairman of Soros Fund Management feels that it is only now, that US is entering into a recession. CNBC-TV18 quoted Mr Soros as saying that the subprime crisis is likely to lead to losses worth nearly USD 1 trillion.

He said that “US has not yet seen the full effect of possible recession. The current US administration does not recognize the magnitude of problem. The situation in US going to get worse before getting better.”

Mr Soros believes that the willingness or fear to extend credit can create a boom or bust cycle. He said “Credit default swaps have become a large business. Credit default swaps can be done on a thin margin, min cap & large volumes.”

Mr Soros said “I hold this market fundamentalism primarily responsible for the current financial crisis. This is a man made crisis and is made by this false belief that markets correct its own excesses. That is the job of the regulator. And the regulators failed to perform their job.”

Mr Soros added that “It is a question of how flexible the market is and how soon the full extent of the losses are recognized. But I think the situation is more serious than the authorities admit or recognize.”