‘Enormous Losses’ At U.S. And European Banks Still Not Recognized
$329.2 billion. That’s what financial institutions worldwide have recorded in credit losses and write-downs since the beginning of 2007. And Carlyle Group Chairman David Rubenstein is saying that banks and financial institutions in the United States and Europe still have “enormous losses” from bad loans they haven’t yet recognized, according to Bloomberg’s Alison Fitzgerald and Ryan J. Donmoyer earlier today. At a meeting of the Institute for Education Public Policy Roundtable in Washington, Rubenstein said that it will take at least a year before all losses are accounted for, and some financial institutions may fail.
A domestic policy advisor to President Jimmy Carter, Rubenstein said that sovereign wealth funds may not ride to the rescue of problem institutions this time around. He explained that the funds are more cautious these days after losing $25 billion on their investments in struggling banks and securities firms worldwide. Rubenstein noted that of the $60 billion of capital provided by sovereign funds to financial institutions last fall, these investments are now only worth around $35 billion.
Source:
“Rubenstein Says ‘Enormous’ Bank Losses Unrecognized (Update2)”
Alison Fitzgerald, Ryan J. Donmoyer
Bloomberg, May 13, 2008
May 13th, 2008 at 7:22 pm
So how should investors use this article? I believe that financial markets have already discounted all the losses so far as well as some more. If you can manage to buy solid companies like JNJ, PG, GE you should be able to weather any storm..
May 13th, 2008 at 11:13 pm
“So how should investors use this article?”
Not as an investment tool…
In all seriousness, thanks for the comment Dividend Growth Investor. And nice blog.