In Barron's over the weekend, economist Nouriel "The Office of Prophet of Doom of the 21st Century" Roubini said the ongoing financial crisis will lead to credit loss of at least $1 trillion and "most likely closer to $2 trillion."
Now this is a global number, and as market strategist Ed Yardeni notes, Roubini's forecast, as well as the trillion-dollar estimate of the IMF both assume all this bad debt is marked to market. Some of those losses may be eventually recouped. But if Roubini is anywhere close to being right, there will be immense pressure for governments to start buying this bad debt. But hey, every year that we in the United States do nothing about entitlement, liabilities add $2 trillion to $3 trillion to our long-term debt. So, what's another trillion?