Thursday, April 17, 2008

Finished reading the Asset Level classification yet?


  1. thinking very hard
  2. looking at the flow of information on the trading desk daily
  3. and reading prospectuses, trade docs, and even annual reports (10Ks)

I believe:

  • LEH has entirely Alt-A mortgage loans in its Level 3 Assets.
  • GS has a LOT of unsold ABS CDOs in its Level 3 Assets.
  • MS has a bit of everything with Subprime and Alt-A being larger than the rest.
  • C has a LOT of ABS CDOs and unsold LBO loans.

Of the four, I think if I deduced correctly, GS is in the worst predicament of all. Despite the NEVER ENDING HYPE.

Wall St. is indeed first and foremost a marketing machine with few other qualifications.

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