Level Three Assets: Banks & Brokers
Three terrific charts on Level 3 assets -- these are the difficult to trade/value/sell junk.
Check out Citi, and Fannie & Freddie!
Charts via Jake at EconomPic
I cannot figure out why the SEC and FASB simply refuses to force firms to inform investors what is actually on their books. I guess they are particularly enamored of the Japanese model.
FASB: OK For USA to Turn Japanese (July 2008) http://bigpicture.typepad.com/comments/2008/07/fasb-ok-for-usa.html
Turning Japanese? (September 2003) http://bigpicture.typepad.com/comments/2003/09/turning_japanes.html
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Yes...the Japanese model works here because human nature never changes. For anyone who ever worked in a large corporation, it is ingrained in you that you don't want to send bad news up the ladder. I'm sure the people who are telling the CEOs what is going on are putting a positive spin on it...and the people below them are putting a positive spin...that is how excrement turns to gold once it gets to the CEO suite. The CEO makes 400 times the grunts' salary, so he/she is basically out of touch from the getgo. And the shareowners don't exert control, because the CEO own tons more shares than most shareowners.
As for Japan, I remember visiting there in 1999 and asked my friend about some beautiful large buildings in downtown Tokyo...he said they were empty - that they were from the "bubble time." Guess what...welcome to bubble time in America.
Posted by: Steve Barry | Aug 15, 2008 2:45:25 PM
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