On Friday, the German daily Süddeutsche Zeitung (SZ) leaked a bombshell – a confidential report by Bafin, the Federal Financial Supervisory Authority, found that German banks were sitting on over 800 billion euros in toxic assets. Just three months ago, the reports coming out suggested the problem was only half as large, 400 billion euros.

I don’t much like Ken Lewis. It should be fairly obvious to everyone that he is a man who has only his own interests at heart. But, his revelation that BofA bought Merrill Lynch for the agreed-upon September price, despite Merrill’s having an additional $7 billion in losses is grounds for legal action.
Let’s review the [...]

Ken Lewis, the embattled CEO of Bank of America, has recently admitted to being coerced by U.S. Government officials to consummate the Merrill Lynch acquisition. The problem for Lewis is he may have neglected his fiduciary responsibility to shareholders in bowing to this pressure. The SEC is now investigating. See the video [...]

If you read my recent post on How big banks earned so much money this quarter you would see that much of the income at Wells, JPMorgan, US Bank and others came from refinancing old mortgages. While this may be a boon to present income, it is very much a problem for the legacy [...]

Despite the fact that I can envisage a cyclical upturn this Winter, the menace of bank writedowns is ever-present. One analyst who has been particularly prescient on warning on this front is Mike Mayo, now working at Calyon. Below David Faber of CNBC talks about a recent prediction by Mayo that writedowns will be even [...]

We should consider Spain one of the four original bubble markets where residential property markets soared to ridiculous levels during the housing bubble.  The bubble has now popped and those countries, the U.K., the U.S., Ireland and Spain, are reeling.  To be sure, there were bubbles in other markets as well. However, these four markets [...]

Because I received a message via e-mail that my previous post on mark-to-market was misleading, I thought I would clarify what is happening with FAS 157 and provide some good links.
The long and short of the rule is it gives more specific guidance as to when a market is distressed and an asset must not [...]

Of course you know I think credit cards are going to produce a tsunami of writedowns, right? Things are looking more and more like that tsunami is right around the corner:
Credit card writedowns soared to record levels in February, representing an all-time high in the 20-year history of the Moody’s Credit Card Index, as [...]

You might have thought house price declines were slowing. I certainly had hoped so. The latest data from January 2009 from the S&P/Case-Shiller index suggests this is wishful thinking as year-on-year declines hit another record of 19%. The decline was not only steep, but very broad-based.
Data through January 2009, released today by [...]

Dunfermline, the largest uilding society in Scotland was forced into the hands of the Nationwide.  This happened only after the U.K. government was forced to pony up 1.6 billion pounds – not the best of news for Gordon Brown before a major world summit.
As the Times Online says:
The state-backed rescue brings to six the number [...]