Tag: toxic assets

Business Models

“Even though we were in and looking you still couldn’t see [where the bottom was]” | KKR

Colin Henderson

Listening to this interview is interesting and sobering for banks. The highlighted quote below tells all. Henry Kravis and George Roberts (KKR) | FT Interview FT: How do you see the opportunities that have been thrown up by this incredible dislocation? Is the government a good partner for KKR? HK: We looked at quite a few of the banks over time and we turned them down because we couldn’t see what was in the banks. Even though we were in and looking you still couldn’t see [where the bottom was]. I think there may be some programmes where it will … Continue reading “Even though we were in and looking you still couldn’t see [where the bottom was]” | KKR

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Toxic debts could reach $4 trillion, IMF to warn

Colin Henderson

In a much anticipated upward revision of earlier forcasts, the IMF is expected to increase its estimate of toxic assets, that is loans that should be written off, to $ 4 trillion. The new forecast is expected 21st April, and reported today by The Times. The forecast apparently will cover primarily US-originated assets but this forecast introduces European-originated assets. This represents the most ocnsequential statement of evidence yet, that this is a debt crisis which must be resolved before other elements of the banking system will return to any degree of normality. It will also require changes at the top … Continue reading Toxic debts could reach $4 trillion, IMF to warn

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“Too big has failed” | FRBKC

Colin Henderson

This extract from the introduction in this speech summarises the situation well, both in US and UK.  It is such a clear example of taking the wrong actions (injecting cash into banks) over and over, yet not succeeding in the objective of restoring confidence.  Bank stocks have now reached the point that they have no impact on the Dow Jones index.  This means confidence is not just down but eliminated. Time to address the root problems: asset values and resulting insolvency management change Too big has failed | [pdf] Federal Reserve of Kansas City – Thomas Hoenig Over the past … Continue reading “Too big has failed” | FRBKC