Bill Gross's calculation about corproate loss in 2008

But rating agencies and analysts are predicting a rise in corporate defaults in 2008 as the US economy slows. Mr Gross himself calculates that, if total investment grade and junk bond defaults approach historical norms of 1.25 per cent, $500bn of the total $45,000bn of credit derivative contracts could be triggered, “resulting in losses of $250bn or more to the protection-selling party once recoveries are inserted into the equation”.