Banks Keep $35 Billion Markdown Off Income Statements

Discussion in 'Wall St. News' started by ASusilovic, May 19, 2008.

  1. -- Banks and securities firms, reeling from record losses resulting from the collapse of the mortgage securities market, are failing to acknowledge in their income statements at least $35 billion of additional writedowns included in their balance sheets, regulatory filings show.

    Citigroup Inc. subtracted $2 billion from equity for the declining value of home-loan bonds in its quarterly report to the Securities and Exchange Commission on May 2 without mentioning the deduction in the earnings statement or conference call with investors that followed. ING Groep NV placed 3.6 billion euros ($5.6 billion) of negative valuations in its capital account, while disclosing only an 80 million-euro depletion to income.

    The balance-sheet adjustments are in addition to $344 billion of writedowns and credit losses already reported on the income statements of more than 100 banks. These companies have raised $263 billion from sovereign wealth funds, their own governments and public investors to shore up capital. The balance-sheet writedowns also reduce equity, which needs to be replenished. Adding the $35 billion leaves the banks with a $116 billion mountain of losses to climb.

    ``The smart people are the ones who've identified the problems, put them out there in full transparency, and addressed them by raising more capital,'' said Michael Holland, who oversees more than $4 billion as chairman of Holland & Co. in New York. ``There is still billions of dollars of crap out there that hasn't worked itself through the system. Banks need more capital to work that all out.''

    Lousy 35 bn ? Come on, just ask U.A.E. or Temasek ! That´s pocket money for them ! :D :D :D
  2. Daal


    its going to be a new low for wall street when the headlines start to read 'Citigroup soars 5% after annoucing $1.3B in hidden writedowns, lower than analysts estimate'
  3. Its funny. At least during the tech bubble the government and the fed wasnt trying to cover it up. This is a massive conspiracy between wall street, fed, and treasury to pretend that this system is indeed functional and solvent.

    Nothing could be further from the truth. Could there actions being any more desperate?
  4. maxpi


    As leaders that need to calm the panicky masses, that is their job. People bitched when Bush was talking about recession at the very outset of his administration. They said it was his job to talk positive to the American people and you bitch at the end of his term for doing the opposite of the first bitche(s)/bitcher(s) bitch.. you guys put the b in witch most likely. Do you have any good ideas to get us all out of this mess?
  5. I guess I dont blame them. I wouldnt want to go to prison either.
  6. maxpi


    Oh yeah, prison. They were going to prison for war crimes, impeachment for breaking international law, now it's economic stuff....... Bernie Ward, the most sickening radio talk show host on earth, used to spew this garbage all night every night from KGO, then they busted him for child porn, so much for the mental capacities of Bush bashers......

    Anyhow my stimulus check is due just before my birthday, you don't have any good answers to the current crisis, maybe you can tell me what to spend it on? I'm thinking of an alarm system, we have lots of Liberals around here, all on welfare, 90% criminals, the murder rate is through the roof... maybe a gas auto Browning........