$514bn and counting

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.

About Paul Hodges

Paul Hodges is Chairman of International eChem, trusted commercial advisers to the global chemical industry. He also serves as a Global Expert for the World Economic Forum. The aim of this blog is to share ideas about the influences that may shape the chemical industry and the global economy over the next 12 – 18 months. It looks behind today’s headlines, to understand what may happen next in critical areas such as oil prices, China and Emerging Markets, currencies, autos, housing, economic growth and the environment. Please do join me and share your thoughts. Between us, we will hopefully develop useful insights into the key factors that will drive the industry's future performance.

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