“There are still some important losses that have not been unveiled. It’s possible that 50 percent (of bank losses) are still hidden in their balance sheets. The proportion is greater in Europe than in the United States.”

-Dominique Strauss-Kahn, International Monetary Fund’s chief

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Today’s WTF quote comes to us from France, where the head of the IMF is worried about losses hidden on banks balance sheets. This is due in large part to the suspension of Mark-to-Market and the current accounting principles of Mark-to-Make Believe.

Reuters:

“Half of the losses suffered by banks could still be hidden in their balance sheets, more so in Europe than in the United States, the International Monetary Fund’s chief, Dominique Strauss-Kahn, was quoted as saying on Tuesday.

In an interview with French newspaper Le Figaro, Strauss-Kahn also said the IMF thought the euro currency was probably a bit too strong.

“There are still some important losses that have not been unveiled,” Strauss-Kahn was quoted as saying in response to a question on banks, according to excerpts of the interview that were sent to media ahead of publication on Wednesday.”

I’ll try to pull the full interview when it is published . . .

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Source:
Half of banks’ losses may be unknown: IMF chief
Estelle Shirbon
Reuters, Nov 24, 2009 3:01pm EST

http://www.reuters.com/article/ousivMolt/idUSTRE5AN4QD20091124

Category: Bailouts, Credit

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

12 Responses to “IMF: 50% of Bank Losses Still Hidden”

  1. call me ahab says:

    duh-

    is this news- or is it news because it is being acknowledged by the IMF-

    many of those “losses” in this country are being held by the Fed itself-

    guess we will find out once the Fed is audited (why is that such a difficult process that requires congressional legislation?)-

    that alone should speak volumes

  2. flipspiceland says:

    Amazing. “Some losses” and in the next sentence, 50%.

    I don’t think there’s a single person involved in this mess that can speak in plain language without trying to spin it and gets caught every single time trying to minimize the travesty that’s already happened and the further pain to come.

  3. Wes Schott says:

    double duh-

    mark-to-market was suspended around the time of the “devil’s bottom” (March) and the start of QE

    TBTF hording cash, speculating = 60% rebound in the market

    …….extend and pretend

    the USD is now backed by mortgages that are worth a fraction of their face value…any wonder why the USD is tanking?

    Strauss-Khan stating the obvious, but why? where is this going? what is the IMF setting up?

  4. call me ahab says:

    wes- my man-

    was it you that turned me on to that SNL clip the other day? pretty much summed up how how foolish this country must look discussing trillion $$$ programs while we are hemorrhaging trillions at the same time-

    as the Chinese President said- he would like to go to a dinner and a movie before the US “do sex to him”- it’s the least we could do

  5. Mannwich says:

    How is this surprising? Wasn’t that the intent of suspending mark to market? Extend and pretend ad infininitum? Well, at least until the bankers can loot the entire country for as much as possible before it all falls apart, anyway.

  6. kmckellop says:

    Double Dog Dare Ya- Duh
    Nothing in the credit markets have changed since a year ago except that the illusion that a few trillion $”s will correct global deflation of epic proportions…Looks like Japan will be our new market leader..

  7. Wes Schott says:

    @ahab-

    yep, that was me…via my bud charlie…

    Hu Jintao “kiss me”

    BO “err, excuse me”

    Hu Jintao “kiss me”

    BO “i don’t understand”

    Hu Jintao “i’m used to being kissed when someone do sex to me”

  8. CNBC Sucks says:

    Ritholtz, I get your speed on this, but unfortunately, nobody but your learned peeps want to hear about hidden bank losses, what these booby traps might mean for the economy, and what the general lack of transparency in all of our financial institutions — right up to the Fed and Treasury — might mean fundamentally for the future of all Americans. You can testify before Congress, and they won’t want to hear about it. You can take your case to the American people ( http://www.peopleofwalmart.com/ ), and they will only scratch their heads. That is the fundamental problem with the “democratic” form of government.

    I propose a radical new political, economic, and social order where only the financial elites who truly understand what is going on are put in charge of the country.

    Oh wait… ;)

  9. torrie-amos says:

    Duh, there’s a reason why banks hold a trillion bucks and won’t lend, the piper has to be paid, and ben helped them raise the cash thru low rates, alt a foreclosures coming to a court house near you, that is what the money is for, ben can only save em once in public, and in private once, ie, the rates, rocky 2010 ahead

  10. flipspiceland says:

    I know why the people, particularly older people prefer to be lied to: They could die before they ever have to confront the lies they have told themselves and the ones they believe others have told them.

    Ignorance, on a short enough time line, is bliss.

  11. [...] (Hat tip to Barry Ritholtz over at The Big Picture.) [...]

  12. kfunck1 says:

    Probably true, but it’s still not due to the FASB changes, its due to reserve accounting. FSP 157-4 is the biggest red herring I’ve ever seen. THEY. DID. NOT. CHANGE. ANYTHING.