Nouriel Roubini Revises Estimate of Losses

By on January 31, 2009

In an article posted at John Mauldin’s Investors Insight, Nouriel Roubini and Elisa Parisi-Capone state, “we have now revised our estimates and we now expect that total loan losses for loans originated by U.S. financial institutions will peak at up to $1.6 trillion out of $12.37 trillion loans. Our estimates assume that national house prices will fall another 20% before they bottom out some time in 2010 and that the unemployment rate will peak at 9%. If we include then around $2 trillion mark-to-market losses of securitized assets based on market prices as of December 2008 (out of $10.84 trillion in securities), total losses on the loans and securities originated by the U.S. financial system amount to a figure close to $3.6 trillion.”

Source:

http://www.investorsinsight.com/blogs/john_mauldins_outside_the_box/archive/2009/01/26/geithner-china-and-the-specter-of-technical-insolvency.aspx
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