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  • bacbacker bacbacker Apr 2, 2009 10:51 PM Flag

    WHY IS LEWIS DOWNPLAYING EFFECTS OF M2M CHANGES?????

    Thank you for your reply. Very interesting viewpoint; you are saying that maybe there isn't as much toxic asset as people think? So perhaps a recovery this year is not entirely wishful thinking...hmmmm.

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    • I dont think there as many "toxics" as the media & bashers would like to believe. I heard Dick Bove today on Bloomberg. Sharp guy & he threw out #s that blew my mind. Bottom line....98% of loans are paying just fine. Way overblown frenzy & the markets & media took off with it.

    • I'm saying more that the write-downs have possibly been more systematic than we assume.

      e.g. Assets A B and C have similar risk profiles, but asset A has a minuscule disadvantage over assets B and C.

      Because of their similarity, we may be assuming that they have all been written down to say hypothetically 30 cents on the dollar, but what if A was written to 25 cents and B and C to 40 cents? The subsequent write-up may be as a result be less dramatic because the write-down was not that dramatic.

      With nobody buying these assets, it is not too hard to argue the subjectivity of "market-value" if you wanted to argue it - especially if you can swap asset B and C with another institution and justify the difference between them and asset A.

      Just throwing an idea out there...

    • I'm looking at the latest annual report now. Perhaps someone better qualified than I can explain this to me.

      I see a table entitled "Recurring Fair Value"

      First group in the table is "Assets" with a sub category "Derivative Assets" slide over "Level 2" this shows a value of 1.5 billion. Slide over "Netting Adjustments" this shows a value of minus $1.4 billion. Slide over, total assets/liabilities $62 million

      Is this the mark down for derivatives?

 
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