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  • Beware the Financials Value Trap [View article]
    The writedowns already recognized, and the ones to come, represent unwinding of profits that wouldn't have been booked in the 2004-2006 years if valuations had been correct then.

    I haven't done the research, but I'd be willing to bet that a large percentage of those profits were gains on unsold positions. When the derivative markets froze last summer, the game was up, and the only thing left to do was to back out the profits. Which reduces equity, and increases the leverage ratios.

    There will be an end. But no one knows when.
    May 13 13:03 pm |Rating: 0 0
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