More, More, More
Financial Times (02.10.08):
"Senior global policymakers have raised projections for the size of subprime-related credit losses in a move that implies financial institutions will have to increase write-offs. Speaking after the meeting of Group of Seven finance leaders, Peer Steinbrück, German finance minister, said the G7 now feared that write-offs of losses on securities linked to US subprime mortgages could reach $400bn. Subprime losses could rise to $400bn"This is sharply higher than the $120bn credit losses that Wall Street banks and other institutions have revealed in recent weeks – and also far bigger than the US Federal Reserve’s estimates for subprime losses last year of $100bn-$150bn." It's still "unclear where much of this subprime pain would eventually emerge", mostly because our jolly bankers are loath to admit they've screwed the pooch. Tut, tut, says Peer, who along with his buddies "appealed to financial institutions to provide 'prompt and full disclosure' of losses, to restore confidence." Our man Hank, who really, really wants the Japanese and Europeans to "stimulate their economies by fiscal packages", said he wasn't "disappointed [they] had rejected the idea", but went on and "implied that other countries would not escape a US downturn, describing decoupling as a 'myth'". Pretty subtle, that old Hank. Still, he continues to insist he's not "[urging] his G-7 colleagues to use fiscal policy to boost domestic demand in the way the U.S. has." On the other hand, "Treasury Undersecretary David McCormick earlier this week called on other nations to 'take prudent steps to strengthen their economies' demand components.'" And as they say, a nod's as good as a wink to a blind bat.