iBank Writedowns = $100 Billion

Ibank_writedownsNice schadenfreude porn via the WSJ’s Marketbeat:

"The great 2007-2008 parade of writedowns, which was hovering around the $100 billion mark already, has pushed far past that thanks to Merrill Lynch’s $14.5 billion in assets lost related to exposure to subprime mortgages, CDOs and all sorts of other things that were misvalued and are now (hopefully) valued at a more appropriate level.

According to figures calculated by MarketBeat, some $100 billion-plus in positions have been written down for 2007, as the world’s investment banks recognize, en masse, that nobody wants this paper, not even made-up vehicles that have no choice but to buy it. Susanne Craig, David Reilly and Randall Smith reported in today’s Wall Street Journal that banks are going back to basics, reducing risky loans as a result, but that requires that they set aside more capital on their balance sheet, which will hurt earnings.

The lion’s share of the writedowns comes from five companies — Merrill Lynch, Citigroup, UBS Morgan Stanley, and HSBC — who, combined, have written down about $73 billion in assets. HSBC got this party rolling in the first half of the year, with a $4.1 billion writedown, which ultimately turned out to be a harbinger of what was to come later in the year.

The thing is, the writedowns aren’t finished…"

Awesome . . .




Writedowns Surpass $100 Billion
David Gaffen
WSJ Marketbeat,  January 18, 2008, 8:35 am

Category: Markets, Psychology

Retail Heading Towards Biggest Wreck in 17 Years

Category: Consumer Spending, Financial Press, Retail

Arthur Laffer: US is in Recession Now

Category: Economy, Federal Reserve, Financial Press, Inflation

Counter-Party Risk

Get used to hearing that phrase: Counter-Party Risk. You will be hearing a lot of it in the coming year. Its one of the reasons I disagree with my friend Doug Kass about any bottom in Financials. Consider this small concern: Given the enormous amount of hedging that was done by Investment Banks (Merrill, Morgan…Read More

Category: Corporate Management, Credit, Derivatives

Fox Business Channel Market Top ?

Category: Contrary Indicators, Financial Press

Cramer Rant, Version II

Category: Financial Press

Open Thread: Beginning or the End?

Category: Markets, Psychology, Technical Analysis, Trading

Housing Starts Plunge 14%

Category: Psychology, Real Estate

NYSE % of stocks > than 200 Day Moving Average

Category: Psychology, Technical Analysis

Goldman Smart. You Dumb.

Category: Corporate Management, Credit, Derivatives, Trading