Investment Banks Are Ticking Time Bombs
Sunday, 11. November 2007, 00:06:01
Tick, Tick, Tick...It's The Level Three Bomb writes Jerome A Paris
Goldman Sachs GS experienced the least CDO fallout damage since it was short the mortgage backed security market.
The soon coming damage to be caused by the impact of FASB 157 is going to be worse, much worse than the recent sub-prime losses.
If one takes the Investment Bankers level three assets and divides it by their equity base and makes a comparison, one finds Goldman Sachs has the largest level three assets to equity ratio making it the most sensitive to a further decline of all the investment bankers.
Steven Taub reports in CFO.com that Financial Accounting Standards Rule 157 is going to cause huge write offs as investment banks and other financial institutions can no longer avoid mark to market pricing of securities. The deadline for implementation of this rule is coming up fast: November 15, 2007 with changes to be reflected in 4th quarter investment reporting.
Yes, indeed as Dana Cimilluca writes It's Going To Be The Mother Of All Write Downs, so its wise to go short the financial sector, via the two hundred percent inverse bear market ETF SKF as well as to go short GS.
And the current financial dislocations are nothing compared to the investment hell that derivatives pose; and it has been Goldman Sachs, that has been at the forefornt of derivative development and marketing which have been called have been called Weapons of Mass Financial Destruction by the Wall Stree Journal; thus making Goldman Sachs an excellent long term short selling prospect.
Goldman Sachs GS experienced the least CDO fallout damage since it was short the mortgage backed security market.
The soon coming damage to be caused by the impact of FASB 157 is going to be worse, much worse than the recent sub-prime losses.
If one takes the Investment Bankers level three assets and divides it by their equity base and makes a comparison, one finds Goldman Sachs has the largest level three assets to equity ratio making it the most sensitive to a further decline of all the investment bankers.
Steven Taub reports in CFO.com that Financial Accounting Standards Rule 157 is going to cause huge write offs as investment banks and other financial institutions can no longer avoid mark to market pricing of securities. The deadline for implementation of this rule is coming up fast: November 15, 2007 with changes to be reflected in 4th quarter investment reporting.
Yes, indeed as Dana Cimilluca writes It's Going To Be The Mother Of All Write Downs, so its wise to go short the financial sector, via the two hundred percent inverse bear market ETF SKF as well as to go short GS.
And the current financial dislocations are nothing compared to the investment hell that derivatives pose; and it has been Goldman Sachs, that has been at the forefornt of derivative development and marketing which have been called have been called Weapons of Mass Financial Destruction by the Wall Stree Journal; thus making Goldman Sachs an excellent long term short selling prospect.
WIDGETIZE