Friday, August 15, 2008

Level Three Asset Analysis

Level 3 assets, the "difficult to trade/value/sell junk" have created the following environment per Marc Faber (hat tip Credit Writedowns):

A lot of banks are already bankrupt. A lot of monoline insurance companies are bankrupt and financial institutions hide their rotten assets in level three asset categories where you don’t really need to value them.

Take a look at Freddie's level three assets on a relative basis... yikes!

Source: Bloomberg


  1. Hey Jake, I know you sourced Bloomberg, but could you tell me the dates on the sources you used for this level 3 asset chart?

  2. Jake,

    Any interest in updating this chart? We just saw Hartford lose 50% of its residual market cap today based on assumptions it was still cooking the books on its exposure and viability. But Hartford looks in great shape in the chart, "as a percent of total assets." Where is this data from, and how would you dig deeper?