Whitney Tilson, managing partner of money manager T2 Partners, says banks aren't nearly out of the woods yet, as the credit crisis continues to evolve.
"As of a month ago, worldwide there was $1.3 trillion in bank writedowns," he told FT.com's video site.
"Our estimate is that total losses, looking out many years, will be at least double that, could be triple that."
As a result, "While we're … maybe halfway through the bursting of … (the housing) bubble, we're probably not even halfway through the overall unwinding of this great debt bubble."
In housing, the problem has spread from subprime mortgages to standard ones. Looking at delinquencies and foreclosures of loans backed by Fannie Mae and Freddie Mac, "they're skyrocketing," Tilson says.
"These were people who weren't speculating, who aren't necessarily in bubble markets, but we're in the midst of the worst recession in 75 years. A lot of people are losing their jobs."
Banks already have taken their hits on structured financial products, Tilson says. "The next wave is plain vanilla loans sitting on banks' books that are defaulting at unprecedented rates."
That means, "investors, in their enthusiasm for financial stocks in the past couple months, may be missing how much more pain there is to come," Tilson says.
Others agree that the housing and overall credit crises aren't over yet. Economist Robert Shiller tells Time magazine, "The conspicuous fact with our (Case-Shiller housing) data is that prices are still falling, although at a somewhat lower rate."
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