Posts filed under “Valuation”

Bank Losses: Half Trillion and Counting

Remember the good old days? Ahhh, a simpler time, when we were repeatedly told that sub-prime didn’t matter, that it was contained, that the losses were a mere $60 billion dollars at most, and overall, this would have zero impact on the broader economy?

Only not so much.

We learned via the number crunchers at Bloomberg that the $500 Billion mark in losses and write downs has now been crossed:

"Banks’ losses from the U.S. subprime crisis and the ensuing credit crunch crossed the $500 billion mark as writedowns spread to more asset types.

The writedowns and credit losses at more than 100 of the world’s biggest banks and securities firms rose after UBS AG reported second-quarter earnings today, which included $6 billion of charges on subprime-related assets.

The International Monetary Fund in an April report estimated banks’ losses at $510 billion, about half its forecast of $1 trillion for all companies. Predictions have crept up since then, with New York University economist Nouriel Roubini predicting losses to reach $2 trillion."

That may sound bad — but it looks even worse:


That is the total write-downs and cap raises above.
The net — raise minus write-down — is below:


All charts via Jake at Econompic Data


$500B is about 10X the original contained estimates of meaningless losses . . .


Banks’ Subprime Losses Top $500 Billion on Writedowns
Yalman Onaran
Bloomberg, Aug. 12 2008

Category: Corporate Management, Credit, Derivatives, Finance, Valuation

Steel Owes Thain a Royalty Payment

Category: Corporate Management, Credit, Earnings, Legal, Valuation


Category: Corporate Management, Credit, Derivatives, Legal, Valuation

Betting on Bear’s Bust

Category: Options, Psychology, Short Selling, Valuation

Is the Market Still a Future Indicator?

Category: Apprenticed Investor, Hedge Funds, Markets, Trading, Valuation

FASB: OK For USA to Turn Japanese

Category: Derivatives, Legal, Valuation

Actual Merrill CDO Sale: 5.47% on the Dollar

Category: Credit, Derivatives, Mathematics, Valuation

Rinse. Lather. Repeat.

Category: Corporate Management, Derivatives, Earnings, Valuation

Merrill’s $5.7B Write-Down, $8.5B Share Issuance

Category: Corporate Management, Credit, Derivatives, Earnings, Valuation

Would Benjamin Graham Buy Financials? (No!)

Category: Credit, Earnings, Valuation