Goldman sees $26 billion potential losses at top U.S. banks

[MNeagle]

Goldman sees $26 billion potential losses at top U.S. banks


(Reuters) - The four largest U.S. banks face potential losses of $26 billion over the next several years from their exposure to private-label mortgages and potential losses from delinquency, analysts at Goldman Sachs said.

Private-label mortgages are those offered by private institutions, as against those by government-backed agencies.

The brokerage said $28 billion of market cap was lost between -- Bank of America Corp (BAC.N), JPMorgan Chase & Co (JPM.N), Citigroup (C.N) and Wells Fargo & Co (WFC.N) -- as the market attempted to price in the potential impact of losses on private label securities.

The brokerage cut its price target on Bank of America, PNC Financial (PNC.N), and Wells Fargo and said that it favors JPMorgan Chase & Co (JPM.N) and Citigroup in the group.

Goldman raised its price target on U.S. Bancorp (USB.N), citing improved third-quarter earnings.

On the plus side, it said large banks have improved their credit portfolio and built capital ahead of Basel III implementation.

link (http://www.reuters.com/article/idUSTRE6A24EK20101103?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+reuters%2FbusinessNews+%28New s+%2F+US+%2F+Business+News%29)

[Twisted Titan]

Goldman sees $26 billion potential losses at top U.S. banks


(Reuters) - The four largest U.S. banks face potential losses of $26 billion over the next several years from their exposure to private-label mortgages and potential losses from delinquency, analysts at Goldman Sachs said.

Private-label mortgages are those offered by private institutions, as against those by government-backed agencies.

The brokerage said $28 billion of market cap was lost between -- Bank of America Corp (BAC.N), JPMorgan Chase & Co (JPM.N), Citigroup (C.N) and Wells Fargo & Co (WFC.N) -- as the market attempted to price in the potential impact of losses on private label securities.

The brokerage cut its price target on Bank of America, PNC Financial (PNC.N), and Wells Fargo and said that it favors JPMorgan Chase & Co (JPM.N) and Citigroup in the group.

Goldman raised its price target on U.S. Bancorp (USB.N), citing improved third-quarter earnings.

On the plus side, it said large banks have improved their credit portfolio and built capital ahead of Basel III implementation.

link (http://www.reuters.com/article/idUSTRE6A24EK20101103?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+reuters%2FbusinessNews+%28New s+%2F+US+%2F+Business+News%29)








I have no idea what the hell that means but this is all I could find.



http://webcache.googleusercontent.com/search?q=cache:IXyx8vNnMmwJ:www.basel-iii-accord.com/+what+is+the+basel+3+implementation&cd=1&hl=en&ct=clnk&gl=us





The transitional arrangements include:

1. National implementation by member countries will begin on 1 January 2013.

Member countries must translate the rules into national laws and regulations before this date.

As of 1 January 2013, banks will be required to meet the following new minimum requirements in relation to risk-weighted assets (RWAs):

– 3.5% common equity/RWAs;

– 4.5% Tier 1 capital/RWAs, and

– 8.0% total capital/RWAs.

The minimum common equity and Tier 1 requirements will be phased in between 1 January 2013 and 1 January 2015.

On 1 January 2013, the minimum common equity requirement will rise from the current 2% level to 3.5%.

The Tier 1 capital requirement will rise from 4% to 4.5%.

On 1 January 2014, banks will have to meet a 4% minimum common equity requirement and a Tier 1 requirement of 5.5%.

On 1 January 2015, banks will have to meet the 4.5% common equity and the 6% Tier 1 requirements.

The total capital requirement remains at the existing level of 8.0% and so does not need to be phased in.

The difference between the total capital requirement of 8.0% and the Tier 1 requirement can be met with Tier 2 and higher forms of capital.

2. The regulatory adjustments (ie deductions and prudential filters), including amounts above the aggregate 15% limit for investments in financial institutions, mortgage servicing rights, and deferred tax assets from timing differences, would be fully deducted from common equity by 1 January 2018.

3. In particular, the regulatory adjustments will begin at 20% of the required deductions from common equity on 1 January 2014, 40% on 1 January 2015, 60% on 1 January 2016, 80% on 1 January 2017, and reach 100% on 1 January 2018.

During this transition period, the remainder not deducted from common equity will continue to be subject to existing national treatments.

4. The capital conservation buffer will be phased in between 1 January 2016 and year end 2018 becoming fully effective on 1 January 2019.

It will begin at 0.625% of RWAs on 1 January 2016 and increase each subsequent year by an additional 0.625 percentage points, to reach its final level of 2.5% of RWAs on 1 January 2019.

Countries that experience excessive credit growth should consider accelerating the build up of the capital conservation buffer and the countercyclical buffer.

National authorities have the discretion to impose shorter transition periods and should do so where appropriate.

[RJB]

$26 Billion is chump change when the admitted national debt is anywhere from 14 to 200 trillion and the derivitive market is in the quadrillions.

[Ponce]

I am sitting pretty..........f*ck them all >:( ..............then years ago I KNEW what was going to happen and set myself up........I told people about it and I even posted it in the few sites that I used to visit and for that I was called "Chicken Little"............well.........the little chicken is now a rooster and with a big red crest.

Is going to be bad very very bad........get ready to get your family together at one spot so that you can help each other because that's the only way that is going to work.........or at least make plans.

First post of the day...........good morning to one and all.

[mick silver]

thanks ponce i too have said you will in time need your family.. that why i live were i am at .i have land and two homes on my place and other stuff to help us make it out of what is to come . now i and adding more tools . i have been hitting the actions around here and there some good stuff out there at a cheap price . you just have to look for the deals .