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| Europe |
| Largest British Banks "Technically Insolvent" |
| 2009-01-17 |
| Not so startling news at this point about the banks of an ally. Editorial: the Mark to Market accounting scam, mentioned as the basis for the assessment, is one perpetuated by government to give government an additional revenue stream. It is a scam which has given rise to over valuation and the denouement is the condition of the finance system we have today. On to TFA: Britains biggest banks are "technically insolvent", Royal Bank of Scotland said yesterday, as the global banking industry was rocked by another day of turmoil, including the announcement of $23bn (£16bn) of new losses from Merrill Lynch and Citigroup, the giant US institutions. Analysts working for RBS, one of several British banks to have received emergency funding from the UK Government last year, told the City that "the domestic UK banks are technically insolvent on a fully marked-to-market basis". The warning does not mean British banks are about to go bust, because the assessment is purely theoretical, and RBS said the position was "not unusual at this stage in the economic cycle". However, it will add to pressure on the Government to provide more support for the country's banks. Treasury officials are now set to spend this weekend in talks about a fresh round of measures, which could be unveiled as early as next week, to free up lending to households and major corporations hit by the credit crunch. The value of Barclays fell by a quarter in stock market trading yesterday, amid a series of wild rumours about its finances, although the bank said it saw no need to comment on the drop. |
| Posted by:badanov |
| #10 Gotta like the name Deacon |
| Posted by: .5MT 2009-01-17 19:26 |
| #9 How's it feel to own a Bank, my fellow US citizens? Bank of America was Nationalized (for all practical purposes). |
| Posted by: Deacon Blues 2009-01-17 18:40 |
| #8 I see what you are saying. I guess it depends on the type of investment type. |
| Posted by: bigjim-ky 2009-01-17 16:49 |
| #7 Couldn't disagree more, bigjim. If the investment is long term and the payments are current, there is no reason to mark to market. The investor has no reason to believe they will not be paid off. Current value may be disclosable in a footnote, but historic value is the best most consistent and representative measure. Mark to market is a scam. Should fixed assets also be mark to market based on current resale potential in the used equipment market? Most capital equipment would probably depreciate 50% on day 1. Wonder if that would be deductible. |
| Posted by: Nimble Spemble 2009-01-17 14:22 |
| #6 Technically, Britain, as we grew to think of it is also bankrupt. Gone. Overrun by Islamo scum. Time for the civilized world to write off the entire EU I guess. |
| Posted by: Woozle Elmeter 2700 2009-01-17 12:59 |
| #5 Probably just a hedge fund bear attack. Simple solution set bear traps. If they are not in fact "insolvent" the bears will get burnt, if they are, chalk up another victory for the bears. So big question is, who can stare down who? |
| Posted by: tipper 2009-01-17 11:41 |
| #4 What is the solvency status of the largest US banks? |
| Posted by: Anguper Hupomosing9418 2009-01-17 10:24 |
| #3 Mark to Market accounting uses the real current market value of financial instruments, not what you bought them for or what they MAY be worth in a year. So they ARE insolvent, not just technically. I'll never understand the ability of the business world to lie so much and convince so many people while doing it. |
| Posted by: bigjim-ky 2009-01-17 09:19 |
| #2 Bubbles, bubbles, bubbles, they are such marvelous things - until they pop. |
| Posted by: Richard of Oregon 2009-01-17 08:38 |
| #1 Technically, such a wonderful word. |
| Posted by: g(r)omgoru 2009-01-17 06:21 |