Diane Ritter

Roubini Ups Losses Estimate to 3T - Still Smaller Than the Rescue Packages

Well, unfortunately, the banks are lying to us. They are managing their reporting of their write-downs each quarter, reporting as much as they think they can get away with without spooking investors. It will probably take them 3 or 4 years to write down all of it. And that 3 or 4 years is just a guess. Their balance sheets and many of their assets are so opaque that probably the banks themselves don't know how badly they are in the hole. The Japanese banks are still gradually writing down their real estate and stock market losses, 10 years later, making sure each quarter that the write downs are less than total profit. And until real estate prices stop going down, and foreclosures and credit card defaults and auto loans defaults and business bankruptcies stop going up, no one can know how badly off all the banks really are.