Subprime losses could rise to $400bn Senior global policymakers have raised projections for the size of subprime-related credit losses in a move that implies financial institutions will have to increase write-offs. Speaking after the meeting of Group of Seven finance leaders, Peer Steinbrück, German finance minister, said the G7 now feared that write-offs of losses on securities linked to US subprime mortgages could reach $400bn. This is sharply higher than the $120bn credit losses that Wall Street banks and other institutions have revealed in recent weeks - and also far bigger than the US Federal Reserve's estimates for subprime losses last year of $100bn-$150bn. (...) "The next 10 days to two weeks will be crucial because we are going to have the first audited accounts [from financial institutions] since the crisis started," added Mario Draghi, governor of the Bank of Italy and chair of the Financial Stability Forum, a committee of international supervisors and central bankers. (...) But Mr Paulson said he believed the US stood a good chance of avoiding recession. "I believe that we are going to keep growing. If you are growing, you are not in recession, right?" (...) He implied that other countries would not escape a US downturn, describing decoupling as a "myth".
Senior global policymakers have raised projections for the size of subprime-related credit losses in a move that implies financial institutions will have to increase write-offs.
Speaking after the meeting of Group of Seven finance leaders, Peer Steinbrück, German finance minister, said the G7 now feared that write-offs of losses on securities linked to US subprime mortgages could reach $400bn.
This is sharply higher than the $120bn credit losses that Wall Street banks and other institutions have revealed in recent weeks - and also far bigger than the US Federal Reserve's estimates for subprime losses last year of $100bn-$150bn.
(...)
"The next 10 days to two weeks will be crucial because we are going to have the first audited accounts [from financial institutions] since the crisis started," added Mario Draghi, governor of the Bank of Italy and chair of the Financial Stability Forum, a committee of international supervisors and central bankers.
But Mr Paulson said he believed the US stood a good chance of avoiding recession. "I believe that we are going to keep growing. If you are growing, you are not in recession, right?" (...) He implied that other countries would not escape a US downturn, describing decoupling as a "myth".
paulson, doubtless chosen for his lying ability, was sweating it bigtime, pulling up his psychic bootstraps like a man condemned to actually getting more than a glimmer of just how huge a whopper he was being called on to ask us to swallow.
not a pretty sight ~"When an inner situation is not made conscious, it appears outside as fate." Karl Jung~
