Reply #44: Bernard: In the spirit of playing Level 3 games.....

[DemReadingDU]

Another comment by Bernard in Roubini's blog, posted 2007-11-07 09:25:00
http://www.rgemonitor.com/blog/roubini/224871

In the spirit of playing Level 3 games.....

It is very possible to make a "minimum" estimate of the losses that Wall Street concealed from the public in their last quarterly earnings reports.

This is done simply by tracking how much assets THEY MOVED into the Level 3 category in the last quarter compared to the previous quarter. (Please note this estimate does not even account for the actual losses sustained on ALL OF THE OTHER SECURITIES they hold in the Level 2/3 bins)

When a security no longer has any bid in the market (or bid for "similar" securities), that qualifies it for being moved into the Level 3 bin.

Therefore, the amount that these firms moved into Level 3 in the quarter tells us how much of their securities no longer had any bid in the market.

So let's look at the numbers for how much each of the Wall Street firms moved into Level 3 during the last quarter:

Goldman Sachs $18 BILLION
Morgan Stanley $25 BILLION
Lehman Brothers $13 BILLION
Bear Stearns $2 BILLION
Merrill Lynch (not reported yet)

Looks to me again like Goldman Sachs and Morgan Stanley are the winners of this competition to deceive the public about their actual losses.

If you want to know where I got the numbers from, here's the link:

11/7/07 Bottomless Banking
http://www.forbes.com/home/wallstreet/2007/11/06/banking-citi-merrill-biz-wall-cx_lm_1107citi.html?partner=moreover?partner=moreover


Sorry, I wouldn't want to leave Citigroup and JP Morgan out of the competition to deceive the public about their actual losses last quarter (as shown in my last posting).

Here are the numbers for how much they moved into Level 3 last quarter:

Citigroup $41 BILLION
JP Morgan $18 BILLION

So, ladies and gentleman, the real winner of this competition is: CITIGROUP

Written by Bernard on 2007-11-07 09:46:01
http://www.rgemonitor.com/blog/roubini/224871