Central bankers past and present warned on Tuesday of more pain to come for the U.S. economy and that banks worldwide could take several months yet to reveal full losses from U.S. subprime mortgage lending.[...]
The head of U.S. banking giant Citigroup quit on Sunday, taking the blame for expected losses of $8-11 billion before taxes, on top of $6.5 billion it wrote off three weeks ago.
He (Charles Prince) quit. Took the blame. How nice. Will he pay for any of that?
Charles Prince's departure came five days after Merrill Lynch & Co (MER.N) ousted its chief executive, Stanley O'Neal, following an $8.4 billion write-down there.[...]
Markets were first gripped by a credit crunch in August when interbank lending dried up as banks realized they did not know which of them was dangerously exposed to shaky U.S. home loans.
With precarious U.S. mortgages bundled up into complex financial products and sold on around the globe, uncertainty about where the exposure lies remains intense.
[...]
[Former Federal Reserve Chairman Alan] Greenspan told a forum in Tokyo that high inventories of unsold homes presented a major risk to the U.S. economy and that he was not sanguine about how quickly the glut could be reduced.
God forbid they should be affordable for the working poor. They can just sit there unsold.
Bill Gross, chief investment officer at the world's No. 1 bond fund PIMCO, told CNBC Television the Fed could not afford to let U.S. housing prices fall sharply and would need to cut rates aggressively, perhaps to 3.5 percent.[...]
Estimates of eventual total losses vary but all the figures put forward are staggering.
JPMorgan (JPM.N) thinks the financial services industry is sitting on $60 billion in undisclosed losses. Gross characterizes the subprime crisis as a "$1 trillion problem."
[...]
[George] Soros said in a lecture at New York University that the U.S. economy was on the verge of a serious correction.
In more than one way, I don’t think “correction” is the right term.
....but hey, do what you want....you will anyway.
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