- Infowars - http://www.infowars.com -

Roubini Predicts U.S. Losses May Reach $3.6 Trillion

Posted By admin On January 20, 2009 @ 3:17 pm In Economic Crisis,Old Infowars Posts Style | Comments Disabled

Henry Meyer and Ayesha Daya
Bloomberg
January 20, 2009

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.

  • A d v e r t i s e m e n t
  • efoods

“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.

Read article


Article printed from Infowars: http://www.infowars.com

URL to article: http://www.infowars.com/roubini-predicts-us-losses-may-reach-36-trillion/

Copyright © 2013 Infowars. All rights reserved.