Here come the 3Q losses. As expected, the music stopped and there werent enough chairs to go around.
Now we are seeing losses, huge losses. A billion there. $6 Billion here. $11 Billion there. Bear Stearns, CountryWide, Morgan Stanley, Citibank, Wamu...
And most of these loses only go up through September. Expect more for October, November, and December as one of the largest financial bubbles in history slowly recedes.
Heads are rolling as CEO's and others either resign or get fired. But there were so many moving parts in the mortgage-CDO-housing system, it is hard to see all the connections or predict how far the problems go or how big the problem really is.
Some companies are trying their best to hide any losses by postponing their day of reckoning. If they have more time, maybe the market will come back and their assets will regain their value? Please?!
Expect to hear about a lot of schemes to buy time and postpone losses which almost guarantees the problem will drag on and on. At least one company made deals with hedge funds to get their now diminished assets off their books temporarily - if the fund buys their paper now, the company will buy it back in a year at a guaranteed price and return.
In the mean time, expect to see continued price pressure on real estate as foreclosures and bankruptcies continue to climb into next year.
