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Roubini: Credit Crisis Losses Could Hit $3.6 Trillion

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Dubai has bought 3.5 bn of gold, no 35, as previous reader reports.

Ben of FL 11:14AM January 29, 2009

Just about everyone seems to be missing the mark when it comes to analyzing what is taking us into the current depression.
Housing is not the source of our problem. Neither is the bank finance crisis. These are merely results of the core issue and problem. These are results of faux efforts to postpone the inevitable effects of our core problem.
Which is--the fact that the American worker is not making enough money. If one does not make enough money, it does not matter how much one wants to make his mortgage, credit card, and car payment: one cannot keep up--result "troubled bank assets".
If you look at the ratio between per capita income and GNP in 1970 verses today (adjusted for inflation), you realize that the average American per capita annual income is only $39k and would have to be $90k to have maintained the old ratio. You can blame feminism, all the myriad of work visas, free trade agreements we have entered into, the influx of wetbacks taking construction jobs, etc. But here is the real question--"Are we really willing to make the changes needed to reverse these trends???"
I don't think so.

michael lavery of CA 11:00AM January 22, 2009

the financial system's levergage reached the point of infinity 17 months ago

john q public of NV 7:32PM January 21, 2009

FOR A WALL STREET CLEAN-UP, LEARN FROM BERNIE MADOFF
What if a letter written by Bernie Madoff explaining himself was discovered?
--
http://pacificgatepost.blogspot.com/2009/01/bernie-madoff-letter-of-explanation.html
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….in his own words?

James Raider of WA 11:37PM January 20, 2009

This prediction is easy, Citigroup Bank (C), has received ten times or more, in Fed. bailout money than its market cap. Thus, if a bank owes many more times in debt than the bank is worth, and the bank has no real way to earn money, (except its brokerage unit which its selling off) then the bank is worthless, (insolvent). Now, lets examine the other major banks, they face the same operational model as Citi, same with the European Banks etc. All banks suffer from losses related to sub-prime, (now prime), credit default swaps, and market to market accounting. Look folks, none of this is going away soon, in fact the wheels on the financial cart are ready to fall off after it hits three more bumps. What are they? Insurance companies will fail, commercial loans will fail, credit card companies will fail. This really, is part of the story, the rest has to do with unemployed people don't pay income or property taxes! Therefore, City, County, and State Governments will Fail! I could go on but it would take too long. There are certain things people and the Government could do to protect themselves. However, I am just a construction worker, not an economist, College Professor, Hedge Fund Manager, or alleged expert on a business show, so I am not allowed to advise people. I hope and pray my predictions above do not come true, but they will, because people are not admitting the the day to day problems, thus, how does one arrive at a solution? If interested, I could write more, for example, get ready to pay 70% more for the things you need to live! Or why did a Middle Eastern Country buy 35 billion dollars worth of GOLD last month. Or how about this, why does the main media skim over a gold purchase such as this? I challenge anyone to go out and try to buy this large of an amount of gold without the media camping outside of your home. Good luck!!!!!

John Weidig of IL 6:22PM January 20, 2009

In order to evaluate what the overall situation is, the public needs more factual information on what the banks are worth. What is the basis for saying they are worth a lot less then their liabilities? I am afraid that the media doesn't realize how shallow their reporting appears to many readers.

Leonel Ceniceros of TX 4:44PM January 20, 2009