Bill Gross: Writedowns to hit $1 trillion

According to the Financial News Online writedown-o-meter, banks collectively wrote off $205 billion as of June. Since then, the total has climbed higher. While we've heard many people suggest that the worst is over, Bill Gross, the outspoken bond manager at Pimco, is not one of them. He suggests that banks may ultimately be forced to write down more than $1 trillion, according to Financial News Online. Whew! He told clients there's about $5 trillion in mortgage-related risky assets on bank books. The flip side is that these potential losses will require additional capital, which may prove hard to come by. We'll see more asset sales, more dividend cuts, and less lending. None of this is good news. I'd like to think that $1 trillion is way high, but who knows.

For more:
- here's the article

Related Articles:
Writedowns, writedowns everywhere
How bad will it be?
Writedowns may be masking some good news
Banks to take massive writeoffs