A Swiss Newspaper got a hold of a confidential memo from Bridgewater Associates, one of the world’s largest hedge funds.
The global financial crisis could lead to losses of 1.6 Trillion dollars for financial institutes, according a report in the Swiss Sunday newspaper SonntagsZeitung. It quoted a confidential study by the hedge fund Bridgewater Associates as saying losses for banks holding risky assets could be four times greater than the 400 billion dollars previously estimated.
The hedge fund expressed doubts that the financial institutes would be able to drum up enough funds to cover the losses, something it said could exacerbate the crisis.
The only reason we are not hearing about this is because the Banks refuse to “mark to market” their derivatives. My guess is this means that a lot of hedge fund money is still going short on the financials.