Initially, losses were to be contained, then followed by Chairman Ben's claim of 100B, and then estimated to be 200B by a european bank. Today, the latest calculations out of UBS call for 600B+ losses in total. Since banks have only disclosed about 160B thus far, one can be assured that much bad news is forthcoming. It is also reasonable to believe that losses will soon exceed 1 trillion, if they have not already, due to the cascade effect. This dire outlook will only serve to put a rising floor in gold and attract new PM investors at an accelerated pace.

Europe has tried their best overnight to throw some water on PM's and NY is most likely to try the same. In this environment, they may not be too successful for more than a few hours or even minutes.

Regard - VHF

Financial Firms Face $600 Billion of Losses, UBS Says (Update1)
By Abigail Moses

Feb. 29 (Bloomberg) -- Financial firms are likely to face at least $600 billion of losses as the crisis triggered by the collapse of subprime mortgages batters banks, brokers and insurers, UBS AG analysts said in a report today.

Financial institutions have disclosed more than $160 billion of writedowns and credit losses. Banks and brokers stand to lose $350 billion, according to estimates from UBS's global banking team.

``We have to recognize the risk that the economy will suffer more damage than what consensus suggests,'' wrote Geraud Charpin, head of European credit strategy at UBS in London. ``All the investment schemes that have been built on the basis of a strong and resilient economic backdrop have to be unwound/ scaled down.''

American International Group Inc., the world's largest insurer, reported the biggest quarterly loss in its 89-year history yesterday after an $11.1 billion writedown on derivatives linked in part to subprime mortgages. London-based Peloton Partners LLP said yesterday it is being forced to liquidate a $1.8 billion hedge fund managing asset-backed debt because of tighter lending restrictions on Wall Street.

``The collapse of Peloton's flagship fund yesterday is a reminder to all investors that yesterday's rising star can be tomorrow's fallen angel,'' Charpin wrote. ``Leveraged risk positions are a cancer in this market and the sooner it is treated the better.''