Thursday, Aug 09, 2007
"Healthy" banks can be taken down by other assets weaking as credit defaulters have to sell those assets
Bloomberg: U.S., European Stocks Tumble on Credit Concerns; Banks Retreat
Aug. 9 (Bloomberg) -- U.S. stocks followed European markets lower after losses tied to subprime mortgages spread through credit markets, threatening earnings at banks and brokerages.
Citigroup Inc., Bank of America Corp. and JPMorgan Chase & Co. led declines in financial companies after BNP Paribas SA, France's biggest bank, halted withdrawals from funds that owned subprime loans because it can't value the holdings. Home Depot Inc., the largest home-improvement chain, fell the most in a year after saying the $10.3 billion purchase price for its contractors' unit may be cut as investors shun riskier debt.
Posted by lvmreader @ 05:50 PM (204 views) Add Comment
2 Comments
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1. lvmreader said...
Oh my, oh my, oh my
Can you see just how scary this is?
halted withdrawals from funds that owned subprime loans because it can't value the holdings
Can't value the holdings? Are you not a bank? Maybe if BNP Paribas was a circus, this would be excusable, but a bank?
2. Orwell said...
Like Barings but they camethrough unscathed by a ready buyer purchasing them ... The liabilities were then thought only to be £1bn. (approx).