‘Prosperity is just around the corner’ — NOT

Once again, Wall Street has been shown to be lying about the severity of the credit crisis and the date of its resolution.

It is now estimated worldwide financial sector losses may hit $1 trillion. That’s “trillion” with a T, according to nobody less than the International Monetary Fund.

With each passing quarter, Wall Street’s top bankers have indicated that the worst of the market turmoil was over — only to face more pain months later.

“We thought this was going to be the kitchen-sink quarter, and we’re finding out that CEOs and CFOs still don't have a handle on the credit crisis,” said William Rutherford, a former state treasurer of Oregon who now runs Rutherford Investment Management. “We haven’t disinterred all the dead bodies. What else is out there?”

Beyond the Lehman Bros and other big internationally-connected investment banks, though, many regional-level banks are also shaky. And the losses might not peak until next year.