Friday, December 21, 2007

Goodbye Goldman?

Could Citadel's valuation of E*Trade's CDOs wipe out capital at three big banks?

  • Morgan Stanley: -$29 B (subtract 73% of Morgan Stanley's Level 3 assets of $88 billion -- or $64 billion -- from its capital of $35 billion).
  • Goldman Sachs: -$14 B (subtract 73% of Goldman's Level 3 assets of $72 billion -- or $53 billion -- from its capital of $39 billion).
  • Bear Stearns: -$2 B (subtract 73% of Bear's Level 3 assets of $20 billion -- or $15 billion from its capital of $13 billion).

Posted by lvmreader @ 01:55 AM (2819 views)
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One thought on “Goodbye Goldman?

  • of course not
    these guys hedge those assets
    if you hold an asset, and hedge it with derivatives, you have level 3 asset, and against it a level 3 derivative
    but the risk is much reduced….
    the people holding the bag… is probably YOU, in your mutual fund, or your pension fund…
    the investment banks got hit in billion of dollars, but thats nothing compared to the earnings they have had in the good years,
    while YOU (or WE) are going to be hit in TENS of billions of DOLLARS in our pension & mutual funds…

    Wall Street always have the last word with $$$

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