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Get ready for some bad news and red ink. With the bulk of quarterly earnings reports in the energy industry yet to be announced, there are already $6.5 billion worth of asset write-downs, according to Bloomberg. And that could be just the tip of the iceberg. A Barclays’ assessment last week predicted $20 billion in impairment charges from just six companies. Write-downs occur when the expected future cash flow from an asset falls sufficiently that a company has to report that the asset has lost some of its value. With oil prices half of what they were from mid-2014, oil...

Something seems a little off about the latest plan out of Europe, which features a 50% haircut for Greek bondholders. A complete loss on Greek debt holdings was the other option offered to creditors by leaders like Germany’s Angela Merkel, so by agreeing to take 50 cents on the euro banks render the deal “voluntary.” That one term carries a lot of weight, since it most likely means the haircuts will not trigger payment on credit default swaps (CDS) that investors purchased to hedge against nonpayment of Greek debt, and that may not be such a great thing. Calling a...

Faber: Greece Needs 50 Percent Debt Writedown Friday, 30 Apr 2010 03:15 PM By: Julie Crawshaw Economist Marc Faber, publisher of the Gloom, Boom and Doom report, says Greece needs a debt writedown of as much as 50 percent. “They would have to pay back 30 to 50 cents on the dollar,” and the banks would have to take the losses, Faber says. “If it’s bust, doesn’t help to extend loans or increase loans,” he says, comparing Greece to a corporation that has gone bust. Those who lent money to Greece and bought its bonds should have looked more carefully,...

Bundesbank fears relapse as German banks face €90bn fresh losses The Bundesbank has told German banks to take advantage of renewed confidence while they can to prepare for likely losses of €90bn (£81bn) over the next year, warning that the delayed shock waves of the economic crisis still pose a major threat to global recovery and bank finance. By Ambrose Evans-Pritchard, International Business Editor Published: 5:23PM GMT 25 Nov 2009 The Bundesbank said German banks alone will have to write down 50bn to 70bn euros of loans over the next year The venerable bank said in its Stability Report that...

US banks face big writedowns in toxic asset plan By Francesco Guerrera in New York and Krishna Guha in Washington Published: March 24 2009 23:31 | Last updated: March 24 2009 23:31 The government’s toxic assets plan will force banks such as Citigroup, Bank of America and Wells Fargo to take large writedowns on their loans, requiring them to raise more capital from taxpayers or investors, executives and analysts have warned. Senior bankers say the authorities’ latest drive, announced on Monday, to cleanse financial groups’ balance sheets by encouraging investors to buy troubled residential and commercial mortgages will prompt banks...

$1.1 T Potential Loan Losses Plus $700bn Securities Writedowns: How Sound Is the U.S. Banking Sector? Jan 20 Roubini/Parisi: Assuming a further 20% fall in house prices and unemployment peaking at 9%, we project total loan losses to amount to $1.6T out of $12.4T loans outstadning. Of these $1.6T loan losses, about $1.1T accrue to U.S. banks and brokers.Mark-to-market prices as of December imply around $2T in writedowns on 10.8T securities outstanding. Flow of funds data show that 40% of U.S. originated securities are held abroad. U.S. banks' share of writedowns is about 30-35%, or 600-700bn according to weights...

Toxic corporate CDOs may touch $1 trillion (originated from Bloomberg)

Gross predicts $1 trillion of writedowns Mark Cobley 25 Jul 2008 One of the world's most successful bond fund managers, Bill Gross of Pimco, expects the fall-out from the US sub-prime mortgage crisis to hit $1 trillion (??35bn), in terms of the amount that will have to be written off the global financial services industry's combined balance sheet. The total suggests Gross believes the crisis has much further to run. According to the most recent total on Financial News' writedown-ometer, which is compiled from banks' results, $205bn had been written down as of June. Since then, fresh book-losses have been...

Merrill may write down $5.4 billion in Q2: Lehman By Elinor Comlay and Tenzin Pema Fri Jun 27, 9:45 AM ET Merrill Lynch & Co (MER.N) will likely incur $5.4 billion of write-downs in the second quarter, mainly from its exposure to bond insurers, said an analyst at Lehman Brothers. The report, coupled with a discussion of the write-downs on CNBC, prompted Merrill stock to fall 2.5 percent to $32.23 and highlighted concerns the broker may need to raise capital. Lehman analyst Roger Freeman raised his write-down view by $3 billion for Merrill, making his estimate the highest among Wall...

UBS details subprime losses By Haig Simonian Published: April 21 2008 07:21 | Last updated: April 21 2008 13:56 UBS on Monday revealed that its massive losses in securities related to US residential mortgages stemmed largely from the fact that three separate parts of the group had amassed large positions, without sounding the Swiss bank’s once-vaunted alarm bells for risk. In a report to shareholders two days ahead of its annual meeting, the biggest European casualty of the subprime crisis explains how its elaborate risk detection procedures failed to detect that UBS had built up more than $70bn in potentially...

April 13, 2008 US banks Citigroup and Merrill Lynch reveal fresh $15bn loss Iain Dey 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...

Bankers watch for falling knives as sponsors feel pain James Mawson 25 Mar 2008 Investment banks that have found private equity a lucrative business over the past few years are about to receive a double blow: falling fees from financial sponsors this year as well as writedowns of private equity assets held on their books. The problem is most visible at the largest banks that targeted the biggest private equity firms as clients. Banks specialising in the mid-market are more confident of their ability to withstand the growing capital markets storm. A Financial News survey of 20 of the largest...

Stocks slide as investors scramble for safety By Michael Mackenzie and Saskia Scholtes in New York Published: February 29 2008 19:08 | Last updated: February 29 2008 21:10 Stock prices and bond yields tumbled on Friday as fears about the stability of the financial system sent investors scrambling for the safety of government debt. The yield on the two-year Treasury note dropped to its lowest level in nearly four years, while the S&P 500 stock index fell 2.7 per cent and the Dow Jones Industrial Average lost 2.5 per cent. Traders said sharp falls in the prices of mortgage bonds...

February 24, 2008 Sun shines on some as storm clouds gather over US economy American Account Irwin Stelzer JUST when it seemed things couldn’t get any worse, they did. The Federal Reserve Board’s economists revised their growth estimate down, and their inflation forecast up. The dreaded word “stagflation” has begun to make its appearance, reminding those Wall Street analysts old enough to remember that in the 1970s the economy experienced 15% inflation, 9% unemployment and three recessions. Those who want to update their financial vocabularies further should also take note of the new buzz word, “contagion”, used to describe the...

AIG's derivative woes hit confidence By Michael Mackenzie, Aline van Duyn and Stacy-Marie Ishmael in New York Mon Feb 11, 4:40 PM ET Confidence in the credit markets suffered a fresh blow on Monday after AIG, the insurance group, disclosed problems with valuing its derivatives portfolio. Measures of credit risk in both the US and Europe reached record levels, indicating widespread risk aversion. The news from AIG followed last week's pressure on the credit markets amid fears about a rise in corporate and commercial property debt defaults. In the US, the cost of buying protection against the default of investment...

Credit woes to spread, says PwC chief By Francesco Guerrera in New York and Jennifer Hughes in London Published: February 6 2008 22:01 | Last updated: February 7 2008 00:06 The global credit crisis is set to spread beyond the financial industry as companies in other sectors are forced to write down the value of their investments, according to the head of the largest global audit firm. Samuel DiPiazza, chief executive of PwC, said several US companies had invested in the asset-backed and mortgage-backed securities that caused billions of dollars in losses at Wall Street banks. “It’s not just in...

Banking Bust: More To Come Liz Moyer, 01.16.08, 4:30 PM ET Banks have written down more than $100 billion since the summer. Yikes. Now the bad news: There are still billions worth of potentially toxic securities sitting on the books. The additional $1.3 billion write-down disclosed by JPMorgan on Wednesday was just the latest loss big banks have reported in the fourth quarter. Merrill Lynch is expected to report a sizeable write-down when it reveals fourth-quarter numbers on Thursday, by some estimates in the neighborhood of $15 billion. Bank of America, Wachovia and other big lenders report next week and...