Sep 22 2008

Investment Banks are retro (as in gone!)

Published by at 12:08 pm under retro

Seems amazing that all the major U.S. based investment banks will have disappeared in a period of a few short months. Victims of their own imaginative financing vehicles. Unfortunately, the crisis of confidence that has resulted from all the “un able to be valued” but not all valueless paper they produced is having massive impacts whose extent is still not known. Uncertainty and its associated fear is the major problem. Uncertainty about who is holding how much in the way of bad assets has undermined markets functioning.

Ultimately, whenever that is, I expect the write downs of paper (securities) to be excessive and the underlying assets worth more than is thought. Unfortunately, I don’t know when or at what price level that will be reached! If I did ……..

I wonder what companies or mechanisms will eventually provide the functions that those banks provided. Fully private pools of money, I suppose.

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