IMF Cuts Worldwide Debt Estimate From Horrible to Less Horrible
Here's the silver lining kids: it's all made up anyway. Can you truly justify all these trillions in made up losses? Mix in some accounting magic and securitization and you have not a recipe for disaster but a crisis built upon a tower of paper. That's it. So stop freaking out and kick up your feet to watch it all go up in flames.
Good. We needed to lever it down just a tad. Keep going, we might be on a roll with this. It's probably a good thing that we don't listen to the IMF anyway, right?
The International Monetary Fund on Wednesday lowered its estimate for global writedowns for banks and other financial institutions to $3.4 trillion but warned that loan losses were set to rise as unemployment grew.
In April the IMF estimated in its Global Financial Stability Report that global bank losses could reach $4 trillion but said it cut the figure by $600 billion to reflect rising securities values and new methodology for calculating writedowns.
"Global financial stability has improved, but risks remain elevated and the risk of reversal remains significant," the IMF said. It added that the economic downturn was troughing but the recovery in advanced economies would be extremely slow.
The report said that while banks have enough capital to survive, their earnings are not expected to fully offset writedowns expected over the next 18 months.
It said stronger action was needed to bolster bank capital and earnings capacity to ensure banks could support a recovery.
So that must be why the FDIC is tapping banks' asses for additional premiums? Bend over, Sheila promised just the tip. Relax, you'll only make it more painful if you clench up.