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US bank 'to fail within months' - BBC

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Comments

  • neverdespairgirl
    neverdespairgirl Posts: 16,501 Forumite
    I thought part of the problem was that sub-prime mortgages had been sold on by the million? Or have I got the wrong end of the stick?
    ...much enquiry having been made concerning a gentleman, who had quitted a company where Johnson was, and no information being obtained; at last Johnson observed, that 'he did not care to speak ill of any man behind his back, but he believed the gentleman was an attorney'.
  • Generali
    Generali Posts: 36,411 Forumite
    10,000 Posts Combo Breaker
    neverdespairgirl wrote: »
    I thought part of the problem was that sub-prime mortgages had been sold on by the million? Or have I got the wrong end of the stick?

    It's the sub-prime loans that are packaged up and sold on that make up a chunk of tier 3 assets.
  • Cranston_2
    Cranston_2 Posts: 197 Forumite
    This link shows a great chart on the level 3 assets various banks hold.

    http://econompicdata.blogspot.com/2008/08/level-three-asset-analysis.html

    LevelThree2.png    or

    http://3.bp.blogspot.com/_8rpY5fQK-UQ/SKXK_gw1kRI/AAAAAAAAC2w/kzNJAfzMNB0/s1600-h/LevelThree1.png
    "Brevity is the soul of wit and it is also the essence of effective communication" Rush Limbaugh.
  • Generali
    Generali Posts: 36,411 Forumite
    10,000 Posts Combo Breaker
    There's nothing wrong with holding tier 3 assets as such. The problems only start if you're making over-optimistic assumptions about their value.

    As it is, the Central Banks have agreed to take illiquid assets in as collateral for funding so the solvency of the banks can be maintained as they have been able to borrow more cheaply from the Central Banks than in the money and repo markets (a repo is a kind of loan secured against a bond). That they have been able to borrow cheaply has allowed them to maintain their margins and thus their cashflow.
  • harbinger13
    harbinger13 Posts: 138 Forumite
    Interesting notes on Level 3 assets. Thanks to everyone.
    Recession - if you are forced to drink beer at your home.
    Depression - if you have no beer to drink at all!
    I don't see any of the above - so where is it (recession)?
  • harbinger13
    harbinger13 Posts: 138 Forumite
    Lehman’s secret talks to sell 50% stake stall


    Looks like Lehman is the bank!
    Recession - if you are forced to drink beer at your home.
    Depression - if you have no beer to drink at all!
    I don't see any of the above - so where is it (recession)?
  • WTF?_2
    WTF?_2 Posts: 4,592 Forumite
    harbinger13 wrote: »
    Lehman’s secret talks to sell 50% stake stall


    Looks like Lehman is the bank!

    Got a URL?
    --
    Every pound less borrowed (to buy a house) is more than two pounds less to repay and more than three pounds less to earn, over the course of a typical mortgage.
  • Generali
    Generali Posts: 36,411 Forumite
    10,000 Posts Combo Breaker
    !!!!!!? wrote: »
    Got a URL?

    From the WSJ.
  • PasturesNew
    PasturesNew Posts: 70,698 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    Level 3 assets are like the Faberge egg your granny always says you'll inherit ... but is it genuine? She says so ... but is she lying, or joking? And how much of your money will you waste until you inherit it on the basis "It's OK, I'll get granny's Faberge egg soon ..."
  • WTF?_2
    WTF?_2 Posts: 4,592 Forumite
    The Daily Mash are on it :D

    http://www.thedailymash.co.uk/index.php?option=com_content&task=view&id=1186&Itemid=59

    I’VE TALKED MYSELF INTO TALKING US INTO A RECESSION, ADMITS ECONOMIST
    ..
    He said: "The markets are on a knife edge and the best thing I could do right now is keep my mouth shut and let things calm down a bit. Well done Ken, that was really good. Nice and steady. "And by the way, did you know a huge US bank is going to collapse in the next few weeks? Oh s***! Forget I said that! Bad Kenneth! Bad!
    ..
    Financial experts are already talking themselves into ignoring everything Rogoff says before changing their minds very suddenly at the last minute and descending into a frenzied panic.
    :rotfl:
    --
    Every pound less borrowed (to buy a house) is more than two pounds less to repay and more than three pounds less to earn, over the course of a typical mortgage.
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