Sunday, September 27, 2009

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

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