According to a Bridgewater study leaked by a Swiss paper today, total financial losses from the the current credit crisis will hit $1.6-trillion, well above most current estimates.
Here is the German/English translation:
Explosive Study: The banking crisis will be much worse
Westport (USA) – The expected losses from the financial crisis will reach $1600 billion. To-date financial institutions have so far announced only $400 billion. The pessimistic forecast comes from a confidential study by Bridgewater Associates, the second largest hedge fund in the world.
"We are facing an avalanche of bad assets," says the study. The biggest losses were the U.S. credit banks before. "We have big doubts that the financial institutions will be able to have enough new capital in order to cover the losses," the authors write.
Bridgewater Associates in financial circles enjoy a first-class reputation, several central banks are among its customers. "Bridgewater are on the pessimistic side," says George Magnus, Senior Economic Adviser at UBS in London, "but they have absolutely right."