From the Precipice
Another 20% Price Decline & $700 Billion of Losses?
Eli Broad, a philanthropist and co- founder of KB Home,
the fifth-largest U.S. homebuilder by revenue, said he expects home prices to drop another 20%.
"I don't think we're anywhere near a bottom in housing.
We're going to have a big inventory of unsold, unoccupied homes that's going to take three or four years to clear out."
U.S. Treasury Undersecretary Robert Steel forecast last week that tighter credit conditions "will take a while to work through."
Banks worldwide have reported more than $309 billion of writedowns and credit losses caused by the U.S. subprime collapse and the seizure in credit markets.
Former World Bank President James Wolfensohn said he's "pessimistic" on the outlook for financial markets
and predicted losses from the global credit turmoil may climb to $1 trillion.
"I'm more pessimistic than optimistic.
That doesn't necessarily mean a crash, but it means we're not through the woods yet. There are continued dangers.
It does seem to be a major adjustment on any level. There may be a $1,000 billion worth of losses in it somewhere.
I cannot recall anything similar, certainly in the last 30 to 40 years that I've worked."
Wolfensohn said the IMF's loss forecast of about $1 trillion is now a "consensus estimate."
Eli Broad, a philanthropist and co- founder of KB Home,
the fifth-largest U.S. homebuilder by revenue, said he expects home prices to drop another 20%.
"I don't think we're anywhere near a bottom in housing.
We're going to have a big inventory of unsold, unoccupied homes that's going to take three or four years to clear out."
U.S. Treasury Undersecretary Robert Steel forecast last week that tighter credit conditions "will take a while to work through."
Banks worldwide have reported more than $309 billion of writedowns and credit losses caused by the U.S. subprime collapse and the seizure in credit markets.
Former World Bank President James Wolfensohn said he's "pessimistic" on the outlook for financial markets
and predicted losses from the global credit turmoil may climb to $1 trillion.
"I'm more pessimistic than optimistic.
That doesn't necessarily mean a crash, but it means we're not through the woods yet. There are continued dangers.
It does seem to be a major adjustment on any level. There may be a $1,000 billion worth of losses in it somewhere.
I cannot recall anything similar, certainly in the last 30 to 40 years that I've worked."
Wolfensohn said the IMF's loss forecast of about $1 trillion is now a "consensus estimate."
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