Posted on April 13th, 2008 in Daily Stock Market / Economic News - The Real Story
NOT SO FAST! I thought last quarter was it…so now more write-downs and they are calling it the ‘trough’. We all know that is not the case. The operative statement in this story is ‘subprime’, because these write-downs only are on their subprime boo. What about other mortgage types such as alt-a, prime and home equity lines/loans? What about commercial paper, leveraged loans, auction rates, and the multitude of acronyms used by the financials alchemists over the past several years to peddle their trash off as treasure. -Best, Mr Mortgage
CITIGROUP and Merrill Lynch will heap further pain on Wall Street this week as they reveal additional sub-prime write-downs totalling $15 billion (£7.6 billion) or more.
In another sign of the intense pressure on leading banks, Deutsche Bank is attempting to offload some of its €35 billion (£28 billion) of toxic debt to a consortium of private-equity firms.
Huge exposure to American mortgages is expected to result in Citi taking a $10 billion hit to its accounts, dragging the bank to a first-quarter loss of almost $3 billion. Some analysts believe Citi’s write-downs could stretch to as much as $12 billion.
Merrill will suffer $5 billion of write-downs, analysts say, which would push the bank $2.7 billion into the red.