What is anything worth???? Goldman recommends shorting
April 11 (Bloomberg) -- Goldman Sachs Group Inc. downgraded shares of General Electric Co. to ``neutral,'' saying the company's surprise first-quarter profit decline raises ``credibility concerns.''
April 11 (Bloomberg) -- Washington Mutual Inc.'s full-year loss will be wider than first estimated, according to Goldman Sachs Group Inc. analysts, who recommended selling the shares short. ...``WaMu is most exposed to states where we forecast severe home price depreciation, and subsequent mortgage credit deterioration,'' the analysts wrote. Goldman expects mortgage- related losses between $17 billion and $23 billion, the analysts said. Washington Mutual may have a $14 billion provision charge in 2008, the analysts said.
Financial assets are imploding everywhere. Auction rate securites. Mortgage backed securities. Corporate Debt. Credit Card Portfolios. Auto Loan Portfolios. ect......
These assets represent tens of trillions of dollars of value all over the world. They were the foundation for trillions in profits over the past seven years. Heck, half of GE's earnings came from financially related activities for a company that was once primarily a manufacturer.
Some of us have been pointing out that book value of HBs is no where close to the amount represented by many HBs. We have seen deals recently transact at $0.16 on the dollar. We know that some of the companies are LYING about the value of their assets. This is simply HBs and something tangible like land.
What about all the companies in America with Financial assets. We have seen companies recently write down the value of Auction Rate Instruments that had been parked as an alternative to cash. What about credit card portfolios for retailers. What about mortgages for banks and commercial real estate loans. We are talking about trillions and trillions of represented value that may be illusory.
With a key stroke, a company could be solvent one day and bankrupt the next.....only by valuing its assets at market value. Amazing.
Now Goldman is telling us that credibility may be in question. Don't you think its about time?
Could you imagine what the true book value of HBs, or many other public and private companies would be, if they were simply honest with shareholders about the value of their assets. At this point, what is anything worth if fair market value were presented?