Monday, Aug 25, 2008
The International Monetary Fund has estimated that financial institutions will suffer a total $945 billion in credit losses.
MarketWatch: Financial crisis enters new, uncertain stage
JACKSON HOLE, Wyo. (MarketWatch) -- The financial crisis has entered a new phase and will likely bring total credit losses above $1 trillion, according to a leading academic who has been studying the turmoil since its beginning a year ago.
Princeton University economics professor Hyun Song Shin says the subprime mortgage crisis has already cost financial institutions roughly $500 billion. Now, however, the problem has spread to the real economy, and losses on credit cards, consumer and business debt should match or exceed those from subprime mortgages and the like, he said.
Posted by malct @ 07:59 AM (1022 views) Add Comment
9 Comments
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1. fubar said...
I opened the article as linked. It doesn't seem to be the one you refer to at the top of the page. Or maybe I'm missing something?
2. malct said...
Hi fubar, my title is a direct quote from the article
3. Sobers said...
Well, Duh! Have the infinitely wise Powers That Be only just worked out that if the banks hosed money into sub-prime mortgages they also probably did exactly the same in their loans for credit cards, personal unsecured loans, commercial real estate lending, small business lending etc etc? Losses in sub-prime will not be the end of it. And most of these credit card & loan debts have no assets left to back them. The money's gone, spent, and it ain't comin' back!
4. scandinavian pessimist said...
Try this link instead:
http://www.marketwatch.com/news/story/economist-sees-new-uncertain-stage/story.aspx?guid=%7BCD14AD72%2D143B%2D4794%2DA2A5%2DB34FE777F4BD%7D&dist=msr_4
5. fubar said...
That one does it Thanks. Seems the link at the top of the page goes to the worng place.
6. icarus said...
Well done SP.
"The Fed had not demanded any quid pro quo from Wall Street in return for the extra liquidity it provided".
"The Fed had blurred the distinction between what was in the public's interest and what was in Wall Street's interest".
"The Fed has been pathologically secretive about the terms on which financial support is made available to (banks)"
But then nobody asks why.
7. Guiriduro said...
icarus > But then nobody asks why.
People rarely do, until it affects them. But this will - by lumbering the taxpayer with such a gigantic burden of debt, that exorbitant taxes and/or a complete dollar collapse are the only possible outcomes in the medium term, in order to save Wall Street in the short term. Both are politically unacceptable (somewhat like very low offers on a house, ultimately they are your only 'good' option), but once the US runs out of donor nations ready to lend to it under increasingly high risk / low reward circumstances, the outcome becomes unavoidable, and much the worse given the decades of monetary and fiscal evasion which sustained it. America is bankrupt, has been for some time, but the increasingly frenetic window-dressing and cosmetic fire-fighting is only providing the rich with enough time and liquidity to secure their already ill-gotten gains, before the music finally stops and the rest have to foot the bill, which will be staggering and will lead to a new generational Depression. Who better to lead it in than a man who has studied it so closely, Ben Bernanke. Perhaps all his study was not in fact to avoid it, but to precipitate it.
8. harold said...
"But then nobody asks why."
There is a gapping chasm between blogs, which are screaming about this issue, and the soft approach taken by the MSM. Answer: stop buying Murdoch’s effluence.
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