Bloomberg has a shocking story on Roubini’s prediction for US losses: Roubini Predicts U.S. Losses May Reach $3.6 Trillion
U.S. financial losses from the credit crisis may reach $3.6 trillion, suggesting the banking system is “effectively insolvent,” said New York University Professor Nouriel Roubini, who predicted last year’s economic crisis.
“If that’s true, it means the U.S. banking system is effectively insolvent because it starts with a capital of $1.4 trillion. This is a systemic banking crisis.”
Losses and writedowns at financial companies worldwide have risen to more than $1 trillion since the U.S. subprime mortgage market collapsed in 2007.
President Barack Obama will have to use as much as $1 trillion of public funds to shore up the capitalization of the banking sector, following the $350 billion injection by the Bush administration.
Bank of America Corp., the largest U.S. bank by assets, posted a quarterly loss of $1.79 billion. Citigroup Inc. posted an $8.29 billion fourth-quarter loss.
Oil prices will trade between $30 and $40 a barrel all year, Roubini predicted. I see commodities falling overall another 15-20 percent,” Roubini said.
As seen in the USO chart, oil prices have been in a free fall. Every little rally is getting sold into. Lets see if it stays in the trading range as predicted by Roubini.
Banks have been in a absolute free fall and rightly so look effectively insolvent.
Roubini has been right on many many occasions and i have no reason to believe he is wrong this time too.