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Credit Crisis Math: Report Sees $1.5 Trillion In Losses

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Over the weekend word began to leak out about a report from Europe predicting losses at financial companies would be twice as large as many had predicted and far larger than have been declared by banks and securities firms so far. In April the IMF had estimated that world wide losses from mortgages and other debt would amount to $1 trillion. The new report, which turns out to have been based on a confidential memorandum from Bridgewater Associates, put that losses at half again as high, $1.5 trillion. To put this in perspective, that would mean that we're only about one-third of the way down.
The German language newspaper SonntagsZeitung said there will probably be a financial "avalanche" of distresses debt securities. It warned that financial institutions may not be able to raise enough capital to cover the losses. In other words, we should be ready to see at least one more bank or brokerage collapse. At least one.
Brisante Studie: Die Bankenkrise wird noch viel schlimmer [SonntagsZeitung]
Banking Crisis May Cause $1.6 Trillion in Losses, Sonntags Says [Bloomberg]


Bridgewater Associates Suggests Fate Worse Than Firing In Store For Hyenas Caught Cheating On Day-Long Principles Exam

A couple weeks back, we noted that Bridgewater Associates had informed employees that they would be required to sit for an exam on the contents of Principles, a 123 page company handbook of sorts, written by founder Ray Dalio and comprised of hundreds of "principles" that guide every aspect of life at the firm. Though familiarity with them has always been an essential part of the job, there has never been a formal test determining that all employees met the required level of efficiency and some people were said to be a bit nervous about what to expect. Luckily, a group called the Principles Training Team sent out an email yesterday walking everyone through what "Test Day" will entail and it appears there is nothing to worry about. The exam, which will begin at 9AM and end at 5PM with a break for lunch is simply "meant to feel like a day-long conversation on Principles." That doesn't sound so bad, right? Sure, parts of that conversation (which will take place between you and your computer), during which you "should have no materials on your desk," will be graded, but Bridgewater is simply trying to determine "what you know and honestly think about Principles." Think of this thing as just a coupla wildebeests, havin' a chat. Of course, as is the case in any animal kingdom, sometimes you'll find a few wildebeests looking to cut corners via cheat sheets-- you don't want to be those wildebeests, as the PTT will "audit for cheating, and cheating will be dealt with severely." To that end, don't be a weasley wildebeest who suddenly comes with a stomach bug on Test Day. The PTT will "keep track of lateness or unexpected absence," and suggests one might want to "think twice about calling in 'sick'!" Good luck to all! ******************************************* Earlier: A Wildebeest Leaves New York Traveling North At 10 MPH. A Hyena Leaves Westport Traveling South At 15MPH. At What Time Does The Wildebeest Get Eaten?