More bank loan losses coming

US bank large-loan (>$20Million) losses have reached $53Billion USD in 2009, according to Yahoo Finance AP.


"
The report said total identified losses of $53.3 billion in 2009 surpassed last year's total of $2.6 billion, and nearly tripled the previous peak in 2002, when losses totaled $19.1 billion...


While the economic downturn was first pegged to residential mortgage loans, banks and lenders are now having problems with commercial real estate...
"


So... what about the derivatives like CDOs and CDSs riding on these loans? If a paltry $2.6Billion loss wrecked such havoc in 08, what the heck will $53Billion unleash, eternal damnation?!


Keep in mind the S&P500 remains quite over valued, PE ratio at Aug 31st 09: 129.19