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Strategies & Market Trends : Value Investing

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To: Spekulatius who wrote (33036)	1/17/2009 1:10:11 AM
From: Spekulatius	Read Replies (1) of 78751

STT - STT posted an shocking (IMO) 8k today: the unrealized market to market losses are 5.5B$ as of 12/31/08. Tangible equity is about 6B$ as of 9/30/08 so theoretically that is all gone. Now unrealized losses due not need to acknowledged if management does not assume them to be other then temporary. Great! But 3.6B$ of those unrealized losses sit in this infamous conduit. If this conduit needs to be consolidated on STT's balance sheet those losses need to be realized - so this even would reduce STT tangible value to about 2B$. Then on the other hands I read about the high tier 1 leverage ratios of STT (8.4%, 16% risk based). It seems that my simple math would indicate that STT is almost illiquid (tangible equity depleted by market to market losses) while their regulatory capital is just fine. Well STT is supposed to be one of the stronger banks.FWI i don't own STT right now but i think given the choice I would sleep better being short than long the shares. As of December 31, 2008, there were $5.5 billion of after-tax net unrealized losses associated with our portfolio of investment securities available for sale and held to maturity. idea.sec.gov

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