BofA carrying loans on books for $44 billion above fair value

This news comes via Reuters:

Bank of America Corp is carrying loans on its balance sheet marked at more than $44 billion above their fair value, the company said in its annual report filed with U.S. regulators on Friday.

The bank said it ended 2008 with $886.2 billion in loans, but estimated the fair value — or market price — for these loans as $841.6 billion.

In a related Bloomberg article, an analyst from Friedman, Billings & Ramsey gets right to the point:

“That’s the heart of why these companies are trading where they are,” Friedman Billings Ramsey & Co. analyst Scott Valentin said in an interview. “Technically, if you mark-to- market the entire balance sheet, most of these banks are insolvent.”


Bank of America SEC Filings
Bank of America Loans Valued at $44 Billion Less Than Books Say –
BofA carries loans $44 billion above market value – Reuters

  1. Swedish Lex says

    You did not have to Einstein to see this one coming. Makes Geithner’s stress tests even more ludicrous, if that was possible.

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