Since the crisis began, banks and other financial institutions worldwide have written off or lost a staggering $1.7 trillion, though the losses have been cushioned by capital-raising to the tune of $1.5 trillion.
However, that $200 billion differential -- which doesn’t include current-quarter losses or red ink hidden from view by "flexible" accounting treatments -- could easily widen out to far more troublesome levels amid a renewed downturn in the economy and an abrupt return to reality in the stock market (which would, of course, make it difficult to raise capital by selling shares).
In fact, I think it is going to be a very long time before the financial sector is (legitimately) profitable or in financial good health, regardless of whatever those firms say in their quarterly and annual reports.
