There seems no end to the losses being revealed by the world's major banks. The total has now reached $514bn. 110 banks and investment firms have now posted writedowns. CitiGroup, the largest US bank, tops the list with $55.1bn of losses, closely followed by Merrill Lynch with $51.8bn. Then comes UBS of Switzerland with $44.2bn.
Back in April, the IMF forecast losses of at least $1 trillion, and warned this could lead to recession. New York professor Nouriel Roubini, who has been consistently bearish, but accurate, on the size of the problems, now forecasts the total could reach $2 trillion. That would be equivalent to almost 15% of the output of the US economy.
Roubini is also forecasting that US personal consumption will fall, now the impact of the government's Q2 $100bn stimulus package has passed. This has not happened since 1990. If Roubini is correct, 2009 could be a very difficult year for the chemical industry.