Remember the good old days? Ahhh, a simpler time, when we were repeatedly told that sub-prime didn’t matter, that it was contained, that the losses were a mere $60 billion dollars at most, and overall, this would have zero impact on the broader economy?
Only not so much.
We learned via the number crunchers at Bloomberg that the $500 Billion mark in losses and write downs has now been crossed:
"Banks’ losses from the U.S. subprime crisis and the ensuing credit crunch crossed the $500 billion mark as writedowns spread to more asset types.
The writedowns and credit losses at more than 100 of the world’s biggest banks and securities firms rose after UBS AG reported second-quarter earnings today, which included $6 billion of charges on subprime-related assets.
The International Monetary Fund in an April report estimated banks’ losses at $510 billion, about half its forecast of $1 trillion for all companies. Predictions have crept up since then, with New York University economist Nouriel Roubini predicting losses to reach $2 trillion."
That may sound bad — but it looks even worse:
That is the total write-downs and cap raises above.
The net — raise minus write-down — is below:
All charts via Jake at Econompic Data
$500B is about 10X the original contained estimates of meaningless losses . . .
Banks’ Subprime Losses Top $500 Billion on Writedowns
Bloomberg, Aug. 12 2008
Zillow’s Rascoff Says Housing Market Not at Bottom Yet
Running time 04:37
Spencer Rascoff, chief financial officer of Zillow.com, talks about the outlook for the U.S. housing market. Almost one-third of U.S. homeowners who bought in the last five years now owe more on their mortgages than their properties are worth, according to Zillow, an Internet provider of home valuations.
00:00 Housing outlook, home sellers’ expectations
01:58 Housing market by region; advice to buyers
03:52 Real estate is "still…good asset class."
Zillow’s Rascoff Says Housing Market Not at Bottom Yet: Video
Bloomberg, August 12, 2008 10:10 EDT
One Third of New Owners Owe More Than House Is Worth
Bloomberg, Aug. 12 2008
I’ve been meaning to post something on this for a while, but today’s “discount” finally did it for me. As you may have heard, Starbucks has canned their DVDs and CDs. At a recent visit, I picked up Juno (which I have been meaning to see), and for Mrs. Big Picture I grabbed The Kite…Read More