Back in Re-pricing of assets- from ?marked? to model to ?marked? to market, we mentioned about the re-pricing of securitised debt instruments from marked-to-model to marked-to-market. Today, we shall compare the equity capital base against the marked-to-model assets of major US financial institutions, courtesy of this blog article from Nouriel Robini, who is one of the respected contrarians:
- Citigroup – 105% ($135 billion of marked-to-model assets divided by $128 billion of equity capital base)
- Goldman Sachs – 185%
- Morgan Stanley – 251%
- Bear Stearns – 154%
- Lehman Brothers – 159%
- Merrill Lynch – 38%
What happens if all these assets are marked-to-market? We shudder to think of the outcome.
