April 04, 2008
"Leverage" An off off Wall Steet Drama
"Who's knocking on our door ?" the CFO of a huge investment bank asked.
"Why it's the government Banking Auditor. It's his day of the week to ask us to mark our assets to market."
"Are we in shape for his visit?"
"Uhm, Yes and no. Sorta good news, bad news."
"What's the good news?"
"We've done the math and we figure our remaining mortgages on the books, good and bad, are worth $43 billion, so we're okay."
"What's the bad news?"
"Uhm, well, nobody will buy any mortgage paper at the moment and some righteous auditors have been saying, no valid quotes, no value."
"That's absurd. That would mean we have negative equity."
"Shhh! He's leaving. Bernanke's got him on the phone."