endoftheworld

A Look at Banks' Tangible Book / Asset Ratio

btw- March 7, 2007 SP500 Financials were worth - $2.7trillion

on March 7, 2008, SP500 Financials were worth $1.9trillion

on March 7, 2009, SP500 Financials were worth $511 billion

A Look at Banks' Tangible Book / Asset Ratio

We had $5trillion of mortgage debt in 2000. In 2008, the figure was over $10trillion. With house prices and earnings power of the consumer less than or equal to that in the late 90s, we're going to have over $5trillion of write-offs by debt holders. Guess who owns this debt? What do you think the entire banking sector's market cap was in 2008? and now? And this is only mortgage debt. We're not even considering the commericial real-estate, which along with residential real-estate backs up most of the loans, i.e. assets on the banks books.