Former World Bank chief James Wolfensohn thinks the credit crisis will take $1 trillion in losses out of the market. That is a number much higher than most estimates. It also means that the trouble is not over for financial firms like Citigroup (C), Merrill Lynch (MER), and Morgan Stanley (MS).
According to Bloomberg “It does seem to be a major adjustment on any level,” Wolfensohn said. “There may be a $1,000 billion worth of losses in it somewhere.” He said he “cannot recall anything similar, certainly in the last 30 to 40 years that I’ve worked.”
Douglas A. McIntyre