Via Calculated Risk, the Times has a story that predicts incredible numbers for bank losses.

Toxic debts racked up by banks and insurers could spiral to $4 trillion (£2.7 trillion), new forecasts from the International Monetary Fund (IMF) are set to suggest.

The IMF said in January that it expected the deterioration in US-originated assets to reach $2.2 trillion by the end of next year, but it is understood to be looking at raising that to $3.1 trillion in its next assessment of the global economy, due to be published on April 21. In addition, it is likely to boost that total by $900 billion for toxic assets originated in Europe and Asia.

Those are scary numbers. In fact, if they’re right how does the banking system survive in its present iteration? 

But let’s not forget that the IMF isn’t exactly the best prognosticator on the planet. Remember, they’re the ones who thought everything was going swimmingly In Iceland. If you missed that piece of information, here’s the link.

Lots of people are predicting an awful lot of things these days. It’s probably important to greet much of it with a healthy dose of skepticism.