August 7, 2007 (LPAC)--A German economist has told LPAC that the losses of the investment banks are going to be big between now and end of third quarter Sept 30. Reports he has seen say between $60 billion and $75 billion of corporate bond issuance (mainly junk, but some of it investment-grade) have been "eaten" by them so far. That is, they underwrote it in expectation of selling it, but have had to hold it instead.

They will lose about $10 billion at minimum on this, having to repackage them at significantly higher interest rates and/or buy them for their own accounts. They will lose $8-10 billion in fees on takeovers; and these combined losses will take off most of their combined profits.