Thread Rating:
  • 0 Vote(s) - 0 Average
  • 1
  • 2
  • 3
  • 4
  • 5
Roubini says banking system now insolvent
#1
Roubini Predicts U.S. Losses May Reach $3.6 Trillion (Update1)
2009-01-20 09:36:27.384 GMT


(Updates with Roubini quotes in fifth paragraph.)

By Henry Meyer and Ayesha Daya
Jan. 20 (Bloomberg) -- U.S. financial losses from the
credit crisis may reach $3.6 trillion, suggesting the banking
system is “effectively insolvent,” said New York University
Professor Nouriel Roubini, who predicted last year’s economic
crisis.
“I’ve found that credit losses could peak at a level of
3.6 trillion for U.S. institutions, half of them by banks and
broker dealers,” Roubini said at a conference in Dubai today.
“If that’s true, it means the U.S. banking system is
effectively insolvent because it starts with a capital of $1.4
trillion. This is a systemic banking crisis.”
Losses and writedowns at financial companies worldwide
have risen to more than $1 trillion since the U.S. subprime
mortgage market collapsed in 2007, according to data compiled
by Bloomberg.
Bank of America Corp., the largest U.S. bank by assets,
posted a quarterly loss of $1.79 billion last week, its first
since 1991, and received $138 billion in emergency government
funds. Citigroup Inc. posted an $8.29 billion fourth-quarter
loss, completing its worst year, and plans to split in two
under Chief Executive Officer Vikram Pandit’s plan to rebuild a
capital base eroded by the credit crisis.

‘Bankrupt’ System

“The problems of Citi, Bank of America and others suggest
the system is bankrupt,” Roubini said. “In Europe, it’s the
same thing.”
Stocks in Europe, Canada and Brazil dropped yesterday on
speculation government efforts to shore up the financial
industry will fail to stem the deepening global recession. The
U.K.’s Royal Bank of Scotland Group Plc said it expects to post
a loss of as much as 28 billion pounds ($41 billion) for 2008
and the government got ready to raise its stake in the lender.
Oil prices will trade between $30 and $40 a barrel all
year, Roubini predicted.
“I see commodities falling overall another 15-20
percent,” Roubini said. “This outlook for commodity prices is
beneficial for oil importers, it’s going to imply that economic
recovery might occur faster, but from the point of view of oil
exporters, this will be very negative.”
Oil has tumbled 77 percent from its July high of $147.27
as the global economy sinks into recession, straining the
budgets of crude exporters. Saudi Arabia, Oman and Dubai, the
second-largest sheikdom in the United Arab Emirates, have said
they will post budget deficits this year. HSBC Holdings Plc
said this week it is forecasting an average oil price of $45 a
barrel for this year.
Crude oil for February delivery traded as low as $33.18 a
barrel, down 9 percent from last week’s close, in after-hours
trading on the New York Mercantile Exchange at 4:23 p.m.
Singapore time.

For Related News:
For Top Economic Stories:TOP ECO <GO>

--Editors: Louis Meixler, John Fraher.

To contact the reporters on this story:
Henry Meyer in Dubai at +971-4364-1022 or
hmeyer4@bloomberg.net
Ayesha Daya in Dubai +971-4-364-1023 or
adaya1@bloomberg.net
The shadow is a moral problem that challenges the whole ego-personality, for no one can become conscious of the shadow without considerable moral effort. To become conscious of it involves recognizing the dark aspects of the personality as present and real. This act is the essential condition for any kind of self-knowledge.
Carl Jung - Aion (1951). CW 9, Part II: P.14
Reply


Possibly Related Threads…
Thread Author Replies Views Last Post
  Florida banking agency helped Stanford set up unregulated office to sell his phony CDs Magda Hassan 3 9,264 21-03-2019, 08:47 AM
Last Post: Marius Titulescu
  Starikov: Banksters Began the Dismantling of the Global Financial System Paul Rigby 2 5,838 22-08-2016, 09:38 PM
Last Post: Paul Rigby
  Banking With Hitler Lauren Johnson 0 5,839 12-12-2015, 12:38 AM
Last Post: Lauren Johnson
  Treasury Minister admits more shocking announcement to come about City banking scandals David Guyatt 2 3,058 05-07-2014, 03:31 AM
Last Post: Magda Hassan
  Barclays now investigated over its "Dark Pool" trading system David Guyatt 1 2,919 26-06-2014, 11:38 AM
Last Post: Magda Hassan
  Dulles Brothers, Harry Dexter White, Hiss & Fate of Private Pre-War International Banking - Scott Peter Lemkin 2 3,425 30-04-2014, 01:11 PM
Last Post: Drew Phipps
  N is for Neo-Serfdom, O for Offshore Banking Lauren Johnson 0 2,215 25-01-2014, 07:07 AM
Last Post: Lauren Johnson
  HSBC whistleblower Everett Stern and Occupy Alt Banking Magda Hassan 0 2,369 26-10-2013, 12:54 AM
Last Post: Magda Hassan
  Case study of the banking crisis - Japan's "Lost Decade" David Guyatt 2 5,205 16-05-2013, 01:26 AM
Last Post: Magda Hassan
  Banking on fun David Guyatt 1 2,729 02-05-2013, 08:15 PM
Last Post: Jan Klimkowski

Forum Jump:


Users browsing this thread: 1 Guest(s)