The $400 Billion Black Hole

Liz Moyer writes:

Friday, a group of bank and academic economists calculated the mortgage credit toll on the financial system to be $400 billion. About half of that will be borne by U.S. financial institutions. Most of the losses are coming at leveraged financial firms, like banks, which will in turn pull back lending, applying another brake on economic growth.

Upping the ante, UBS analysts put the hit to the financial system at closer to $600 billion, as investments in troubled assets made on borrowed money are forced to wind down. So far, only $160 billion of losses have been logged by brokerages and banks since the carnage began last fall.

The next shoe to drop? Or just the same old stinky shoe getting tossed around?