Democratic Underground Latest Greatest Lobby Journals Search Options Help Login
Google

Barclays sells $12bn of risky assets

Printer-friendly format Printer-friendly format
Printer-friendly format Email this thread to a friend
Printer-friendly format Bookmark this thread
This topic is archived.
Home » Discuss » Latest Breaking News Donate to DU
 
CHIMO Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Sep-16-09 07:07 PM
Original message
Barclays sells $12bn of risky assets
Source: guardian.co.uk

Two top bankers are leaving Barclays to manage a fund in the Cayman Islands that is buying $12.3bn (7.47bn) of the bank's most troublesome assets.

The deal was criticised by analysts who questioned its complexity, but it will enable the British bank to report a more stable performance in future. Throughout the financial crisis, Barclays has been forced to defend the way it was pricing and accounting for these troublesome assets and is now hoping to smooth out the effect of the investments on its profits.

The assets will not actually be removed from the bank's balance sheet for regulatory purposes but the accounting treatment will be changed, allowing Barclays to avoid taking further big hits by no longer needing to price its assets at current market values through the convention known as "mark to market".

Under the deal terms , Stephen King and Michael Keeley will set up C12 Capital Management which, while based in New York, will manage the new Cayman Islands-registered fund Protium and buy the assets from Barclays.



Read more: http://www.guardian.co.uk/business/2009/sep/16/barclays...



Sounds to me like exponential leverage. But we don't have to worry. Corporations are backed by our governments.

Printer Friendly | Permalink |  | Top
bemildred Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Sep-16-09 07:20 PM
Response to Original message
1. You gotta wonder what is going on under the table?
That's the thing about these "complex" deals.
Printer Friendly | Permalink |  | Top
 
DCKit Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Sep-16-09 08:00 PM
Response to Reply #1
2. Seriously. How can you sell an asset, yet still have it on your books?
Something here really stinks.

I'm thinking it's just another scam to privatize the potential profit, but socialize the risk. Some how, some way, the people are backing this venture - and boy, are they going to be pissed when it comes out.
Printer Friendly | Permalink |  | Top
 
truedelphi Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Sep-16-09 08:14 PM
Response to Reply #2
3. The 20% of the Democratic party that are loyal
To anything, will not get pissed until the FINAL COLLAPSE occurs. Which could be in two weeks or three years.

But really. can a jobless economy, in a world economy that depends on consumer spending, actually sustain itself? Right now, all that is going on is that the Massive Capital Giveaway, er BailOut Trillions may well be propping up companies, some of them to record levels.

For instance, Goldman Sachs is doing great.

Printer Friendly | Permalink |  | Top
 
DCKit Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Sep-16-09 08:25 PM
Response to Reply #3
4. Barclay's is a British bank. The people will go all Hooligan on their asses. n/t
Printer Friendly | Permalink |  | Top
 
truedelphi Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Sep-17-09 02:25 AM
Response to Reply #2
7. After I saw this point, I watched a segment on the Money Channel and the head of Barclays was on
Edited on Thu Sep-17-09 02:29 AM by truedelphi
Where the head of Barclays was interviewed and talked about how wonderful their firm buying out Lehman Bros ahs been.

There is always this deliberate slanting of the Corporate News, isn't there? And I was thinking while watching this - Just how inside the government made such a pleasant and happy deal for Barclay's on this? I don't remember the valuation of Lehman's, but it was a real bargain.
Printer Friendly | Permalink |  | Top
 
DCKit Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Sep-17-09 02:57 AM
Response to Reply #7
8. $25 million - The skyscraper that went with the business was worth 2x that. n/t
Printer Friendly | Permalink |  | Top
 
truedelphi Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Sep-17-09 04:16 PM
Response to Reply #8
9. Thanks for the info. We will probably never know which
Insider helped put this deal toghether, will we?

But just like the government did not favor Wells Fargo's purchasing Wachovia, so someone in the Bush Administration must have been very friendly with someone at BArclays.
Printer Friendly | Permalink |  | Top
 
Frank Booth Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Sep-17-09 01:21 AM
Response to Original message
5. They should have named the new fund JEDI or Chewco.
Printer Friendly | Permalink |  | Top
 
Prometheus Bound Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Sep-17-09 01:28 AM
Response to Original message
6. OK, so they need a 12.6B loan plus .45B capital to buy 12.B assets before discount.
Surely they wouldn't have paid more than 10 cents on the dollar for them, so why the monster loan?
Printer Friendly | Permalink |  | Top
 
DU AdBot (1000+ posts) Click to send private message to this author Click to view 
this author's profile Click to add 
this author to your buddy list Click to add 
this author to your Ignore list Thu Jul 31st 2014, 02:42 AM
Response to Original message
Advertisements [?]
 Top

Home » Discuss » Latest Breaking News Donate to DU

Powered by DCForum+ Version 1.1 Copyright 1997-2002 DCScripts.com
Software has been extensively modified by the DU administrators


Important Notices: By participating on this discussion board, visitors agree to abide by the rules outlined on our Rules page. Messages posted on the Democratic Underground Discussion Forums are the opinions of the individuals who post them, and do not necessarily represent the opinions of Democratic Underground, LLC.

Home  |  Discussion Forums  |  Journals |  Store  |  Donate

About DU  |  Contact Us  |  Privacy Policy

Got a message for Democratic Underground? Click here to send us a message.

© 2001 - 2011 Democratic Underground, LLC