The Big Central Banks are facing write-downs of 20% or more

[whistle]

...in their asset valuations and that could ammount o tens of billions of dollars.

Lehman Brothers investment bank today denied speculation that it is suffering from large losses in sub-prime mortgage-backed securities. However, two financial analysts quoted in the Toronto Globe and Mail say that very widespread losses in these securities are now being faced by investment banks as well as hedge funds!

One analyst, Richard Bove of Punk Ziegel and Co., downgraded all Wall Street banks on July 18 on the grounds that the Bear Stearns hedge fund wipeout did not reflect a problem at that bank, but "reveals troubles with the entire system."

Bove warned that Bear Stearns' acknowledgment of complete losses in mortgage backed securities will trigger a "mass revaluation of portfolios with similar investments ... causing big write-downs at the banks." He said, "The banks are overstating the quality of assets on their balance sheets. When they go back and look at these securities, it could be up to a 15% to 20% devaluation."

The second analyst, Brad Smith of Blackmont Capital, also warned about Lehman Brothers in this "developing situation," but added Canadian Imperial Bank of Commerce as another facing big losses.

I am going to sleep like a baby tonight :wtf:

[Eurobabe]

1. What's a write-don, a mafia loan?

er. typo in your subject line. :hi:

[whistle]

2. Yes, mafia loan sharks....thanks, I corrected it and now I need to head for bed

:pals:

[cliss]

3. Wait a minute. A 20% devaluation?

These companies are not going to survive that big a loss. Also, these companies can't be sold because they won't be able to put a value on them. There will be massive layoffs, closing of branches.