Level 3 Assets: Credit's Next Concern

Level 3 storm about to hit Wall Street
atimes.com/atimes/Global_Eco … 3Dj03.html

Auditors’ Challenge On Bank Assets
thebusiness.co.uk/news-and-a … sets.thtml

Goldman Sachs’s Level 3 Assets Were $72 Billion in Third Quarter

Credit Crunch: More To Come
forbes.com/home/wallstreet/2 … 2citi.html

Well old Charlie’s resignation tonight won’t help the mood much on the back of the merrill resignation earlier in the week.


Meltdown can’t be far off now.

What’s that old saying “when america sneezes the rest of the world catches a cold”

Well america is about to catch a serious dose !.

This new FASB rule will it not just mean that they’ll put the same price on the level 3 assets that they always had? If it doesn’t when will this new info be available to the public?

FASB 157 applies to the auditors, as far as I can see. They’ll have to value the investments themselves rather than just rely on the company’s say-so.

From here:

One of the interesting things is the comparative test. If someone else has written down the value of similar tier 3 investments with an illiquid market, then the auditors appear to be obliged to write down investments to this value. Could it result in predatory write-downs? (i.e. company x writes down it’s small amount of RMBS for Georgia mortgages because it knows company y is holding a big stack of them?).

thanks yoganmahew, so from tomorrow onwards we could start seeing large write downs. I’d say there’s some nervous people in the banks Greenbear has mentioned above. I wouldn’t like to be the auditor/accountant in charge of that.

Rumour at the moment that “certain portions” of FASB 157 will be postponed, no link or confirmation yet…