Financials bleeding is now reaching the next level

That gets close to my numbers I had a global 10 tril. estimate but those estimates are after exceeding a critical mass not so important any more. The potential losses for the system are so big that those numbers can not be covered anymore by real money anyway. The point is since WW2 the global debt is rising sharply and to an extend that no coming generation can pay it down. This system of debt which was implemented by the the central banks (Rothschild’s) is insane and it was sold to us as the emperor’s new cloths although he runs around naked. Money is only a substitute and does not represent any value – it basically serves the aim to tax people in a double way first it takes money away after a set of rules which are insane by nature.
You earn money and have to pay income tax, when from the money left when you go shopping to buy what you need they take again money away (VAT, local taxes etc.). The other part was to create the most powerful controlling and profit machine through credits. Many governments cloths although he runs around naked. than half yourallow banks to take insane credit interest especially for credit cards. The laws protect the banks not the consumers and they create a modern and efficient slavery system as you work for the bank 30 years (mortgage student loan, etc.).
Lets get back to the theme as now some of the overpriced banks as JPM and WFC are nearing a medium term bottom on much lower levels as anticipated. At some point in one year from here many more banks will be bankrupt not only technically as all of them are but also in absolute terms as the governments will have to back of from bailing out or risk a quick failure of government debt. That will in any case be a big drag on bond markets – sometime in this quarter very likely bonds will top out ( other scenario would be Q2).

Roubini Predicts U.S. Losses May Reach $3.6 Trillion (Update1)

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.

President Barack Obama will have to use as much as $1 trillion of public funds to shore up the capitalization of the banking sector, following the $350 billion injection by the Bush administration, Roubini told Bloomberg News. Congress last year approved a $700 billion rescue fund, of which half remains to be disbursed.

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.

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~ by behindthematrix on January 20, 2009.

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