IMF Projects $4.1 Trillion in Losses from the Financial Crisis

The IMF projects financial losses will hit $4.1 trillion with most losses originated from the U.S.:

Worldwide losses tied to distressed loans and securitized assets may reach $4.1 trillion by the end of 2010 as the recession and credit crisis exact a higher toll on financial institutions, the International Monetary Fund said.

Banks will shoulder about 61 percent of the writedowns, with insurers, pension funds and other nonbanks assuming the rest, the Washington-based lender said in a report released today on the state of the global financial system. The fund forecast $2.7 trillion in losses from U.S.-originated loans and assets, compared to its estimates of $2.2 trillion in January and $1.4 trillion in October.

There have already been $510 billion in writedowns but the IMF is projecting $550 billion more by 2010.

In other words, we're not even at the half way point.

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Is there a gap between what IMF and Treasury are saying?

It seems like there is a gap in the size of the problem between Treasury and IMF. IMF said that banks will still need hundreds of billions of dollars in capital and Geithner says that "vast majority" of banks have more than adequate capital.

If IMFs credit losses are accurate than Treasury doesn't have enough current resources to address this problem. They will need congressional approval for money. But the way Treasury has dug itself a hole that will be extremely difficult.

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$2.7 trillion in losses

I believe is way below Geithner as well as the U.S. Treasury. Geithner is lying testifying today before Congress so if you want to take it on as a blog post.....

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