Click on the above picture, and look at the level 2 assets. Here's what Mr. Mortgage, a leadiing housing bear has suggested:
Level 2 ‘assets’ are by definition “Assets that aren’t actively traded, but have quoted market prices for similar instruments - otherwise known as ‘mark to model.’” Could this be more mortgage debt? We all know that all ‘modeling’ systems are broken and have been for years so how accurate are these marks, especially if much of this is mortgage debt. Look at the Wachovia line above. They have $160 billion in Level 2 assets. That number is eerily similar to the amount of toxic Pay Option ARMs they hold.
The Level 2 numbers are so staggering that even a 7.5% haircut across the small group banks below would equal the total write downs by all banks worldwide to date!
Back on May 2nd I posted a story on Merrill playing ‘hide the CDO’ for reference and have updated my chart on 25 of the top financials and their Level 1, 2 and 3 exposure. What I found was astoundinig. Of the 25 companies I studied, their total assets were $14.6 Trillion, Level 1 assets were a total of $1.3 Trillion, Level 3 assets were only $802 Billion but Level 2 Assets were $7.3 TRILLION!
Are you kidding me! 50% of the group’s total assets were Level 2 “assets that aren’t actively traded, but have quoted market prices for similar instruments - otherwise known as ‘mark to model.”
Wouldn’t it be great if the banks let you mark your investment portfolio to what you believed the assets to be worth on those dreaded days on which you receive a margin call?
http://mrmortgage.ml-implode.com/
Level 2 ‘assets’ are by definition “Assets that aren’t actively traded, but have quoted market prices for similar instruments - otherwise known as ‘mark to model.’” Could this be more mortgage debt? We all know that all ‘modeling’ systems are broken and have been for years so how accurate are these marks, especially if much of this is mortgage debt. Look at the Wachovia line above. They have $160 billion in Level 2 assets. That number is eerily similar to the amount of toxic Pay Option ARMs they hold.
The Level 2 numbers are so staggering that even a 7.5% haircut across the small group banks below would equal the total write downs by all banks worldwide to date!
Back on May 2nd I posted a story on Merrill playing ‘hide the CDO’ for reference and have updated my chart on 25 of the top financials and their Level 1, 2 and 3 exposure. What I found was astoundinig. Of the 25 companies I studied, their total assets were $14.6 Trillion, Level 1 assets were a total of $1.3 Trillion, Level 3 assets were only $802 Billion but Level 2 Assets were $7.3 TRILLION!
Are you kidding me! 50% of the group’s total assets were Level 2 “assets that aren’t actively traded, but have quoted market prices for similar instruments - otherwise known as ‘mark to model.”
Wouldn’t it be great if the banks let you mark your investment portfolio to what you believed the assets to be worth on those dreaded days on which you receive a margin call?
http://mrmortgage.ml-implode.com/
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