Toxic debts could reach $4 trillion, IMF warns

[steven johnson]

Source: London Times

Toxic debts racked up by banks and insurers could spiral to $4 trillion ($£2.7 trillion), new forecasts from the International Monetary Fund (IMF) are set to suggest.

The IMF said in January that it expected the deterioration in US-originated assets to reach $2.2 trillion by the end of next year, but it is understood to be looking at raising that to $3.1 trillion in its next assessment of the global economy, due to be published on April 21. In addition, it is likely to boost that total by $900 billion for toxic assets originated in Europe and Asia.
Banks and insurers, which so far have owned up to $1.29 trillion in toxic assets, are facing increasing losses as the deepening recession takes a toll, adding to the debts racked up from sub-prime mortgages. The IMF's new forecast, which could be revised again before the end of the month, will come as a blow to governments that have already pumped billions into the banking system.

In its January report, the IMF said: “Degradation is also occurring in the loan books of banks, reflecting the weakening outlook for the economy. Going forward, banks will need even more capital as expected losses continue to mount.” At the same time, there is a clear shift in congressional attitudes in the United States about simply pumping money into the system, Mr Ashworth said.

The IMF's jump will come as little surprise to economists who have suggested that the bad debts will be much higher than anticipated.

Nouriel Roubini, chairman of RGE Monitor, expects bad debts from US-originated assets to reach $3.6 billion by the middle of next year. This figure is expected to rise when bad debts from assets elsewhere are calculated, he said.



Read more: http://timesmobile.mobi/ms/p/times/op/sztrhjDjKCSj9CuuCukyCgg/view.m?id=36548&tid=3019&cat=Business

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This sounds bad, very bad.

[MasonJar]

1. Take the banks over. This is over the top.

[ShockediSay]

4. BUT WAIT! THERE'S MORE!

Banker lobbyists AND some in Congress pushed the accounting standards board {FASB} to

allow banks to carry 'toxic' {non performing} assets on their books for whatever

they can get away with, and get bonuses based on the gross {very} price of inflated

assets. I hope the international community won't let FASB get away with this crap.

[OwnedByFerrets]

2. Thats a very low figure. The derivatives market was/is valued at

600 trillion....just for the U.S.:banghead:

According to various distinguished sources including the Bank for International Settlements (BIS) in Basel, Switzerland -- the central bankers' bank -- the amount of outstanding derivatives worldwide as of December 2007 crossed USD 1.144 Quadrillion, ie, USD 1,144 Trillion. The main categories of the USD 1.144 Quadrillion derivatives market were the following:

1. Listed credit derivatives stood at USD 548 trillion;

2. The Over-The-Counter (OTC) derivatives stood in notional or face value at USD 596 trillion and included:

a. Interest Rate Derivatives at about USD 393+ trillion;

b. Credit Default Swaps at about USD 58+ trillion;

c. Foreign Exchange Derivatives at about USD 56+ trillion;

d. Commodity Derivatives at about USD 9 trillion;

e. Equity Linked Derivatives at about USD 8.5 trillion; and

f. Unallocated Derivatives at about USD 71+ trillion.

[grahamhgreen]

13. Do you have a link?

[OwnedByFerrets]

15. ...

http://www.siliconvalleywatcher.com/mt/archives/2008/10/the_size_of_der.php

[grahamhgreen]

16. Thank you!

[thelordofhell]

3. So what........The U.S. has a toxic debt of 9+ trillion dollars

Fuck these goddamn banks crying about their debt. I didn't see any of these damn banks willing to help out the U.S. with its multi-trillion dollar debt. Now we're in hock up to our eyeballs to the Chinese and these bastards are hat in hand, looking to get bailed out? Fuck 'em!!!!!

[earcandle]

11. Like GM, tell them to file bankruptcy. They should not be asking for this money.

Banks failed and defrauded Americans by giving away our money
to the people who failed them in the process. That is easy to
understand, and easy to prosecute.

Are there any prosecutors who do anything but announce crimes?

Do any of them actually enforce the law?   

Are we stupid powerless shits or not? 
I ask myself, I ask you. 

How do we be an example of what we want? 

[tomm2thumbs]

5. I predict today that the future monetary standard will be magic beans

Just don't eat too many or you will find out what the 'magic' part is all about

[earcandle]

12. Sweet!

[msongs]

6. banks will not stop ripping off the taxpayer til they are forced to stop - nt

[terisan]

7. The truth: the taxpayer bailout of the bank fraudsters ends when Obama faces impeachment or the USA

is totally bankrupt.

William Black is making sense, Obama, Summers, and Geithner are not making sense;

Obama's agenda may be different from that of Summers and Geithner but they are collectively pushing us over the cliff.

Each month we permit the current course of action to continue is probably equal to a year of misery we are going to experience in the future.

[bkkyosemite]

8. What is after Trillion? What's another few Trillion

:sarcasm:

[tomm2thumbs]

9. Just pay it back in rubles - it'll be fine. Here, I just printed a stack

[earcandle]

10. Who the hell is the IMF, please? When were they founded, what is their stated purpose in their

incorporation filings?   I guess I can go look, but that is
nothing. I have no power. 

Parallel universe governed by world cops, not governors, is
not going to be nice once in place.

My husband says that the IMF are the loan sharks to the third
world.

Are we officially part of that? Is this a global affair? 
Economy?  Will it be announced or just blend in with the rest
of the political-economic-social agenda of this new world
order.

Don't we need more public engagement about these directions we
are taking?  Or has the public interest  lost value doesn't
merit to be part of the public conversation? Man if we have
gone that far away from our core values, we better come to a
screeching halt, to spring from that still point  and take the
leap that will make things right.  We know how to do this.  We
have the technologies in place and young folk want to be the
heroes in their world. They need our support, our forging the
way to give them courage. 

Credit unions...nationalized banks?  Places that will start
business processes moving for the middle classes and lower
classes.  These heartless bastards.

take out time for some amusement? copy and paste cause links
nixed 

http://wwww.earcandleproductions.com/BigSky.mp3

 

[Vidar]

14. End corporate personhood, nationalize the banks & lock up malefactors

after confiscating their assets.