Level 3 Assets: Credit's Next Concern


#1

#2

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
online.wsj.com/article/SB119202158945354654.html

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


#3

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


#4

http://content.answers.com/main/content/wp/en/thumb/3/3b/300px-Classic_time_bomb.jpg


#5

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 !.


#6

#7

#8

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?


#9

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:
metrocorpcounsel.com/current.php?artType=view&artMonth=February&artYear=2007&EntryNo=6190

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?).


#10

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.


#11

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


#12

rgemonitor.com/blog/roubini/226943