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Non-Tech : Goldman Sachs Group Inc. NYSE:GS -- Ignore unavailable to you. Want to Upgrade?

To: Pancho Villa who wrote (333)	11/16/2007 12:09:39 AM
From: Don Green	Respond to of 411

Goldman Sachs (GS) Level 3 Assets Grow 11-12-2007 11:14:39 AM According to reports from Bloomberg, Goldman Sachs (NYSE: GS) held a larger percentage of hard-to-value 'Level 3' assets at the end of Q3 than embattled rivals Citigroup (NYSE: C) and Merrill Lynch (NYSE: MER) Goldman Sachs' Level 3 assets accounted for 6.9% of the company's $1.05 trillion in assets, while Citigroup showed Level 3 assets of 5.57% and Merrill showed 2.5%. Goldman has repeatedly denied rumors of large suprime writedowns, as others banks have bombarded investors with news of new multi-billion dollar writedowns. Goldman showed $72 billion in Level 3 assets as of August 2007, of which Goldman bear economic exposure of $51 billion. Of the Level 3 assets, $41 billion is classified as Corporate and other debt obligations, which Goldman said includes non-prime residential mortgage whole loans and mortgage-backed securities of $1.82 billion and funded leveraged loans arising from capital market transactions of $6.80 billion. The 33% increase in Goldman's Level 3 assets was due in large part to the freezing up of the LBO market, which left firms like Goldman holding the loans. Under new FAS 157 rules, firm's like Goldman are required to disclose a breakdown of their asset valuations. Level 1 Assets are unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2 Assets are quoted prices in markets that are not active or financial instruments for which all significant inputs are observable, either directly or indirectly; Level 3 assets are prices or valuations that require inputs that are both significant to the fair value measurement and unobservable. streetinsider.com Could Level 3 assets threaten CEOs at Goldman Sachs and Morgan Stanley? Posted Nov 7th 2007 10:22AM by Peter Cohan Filed under: Market matters, Citigroup Inc. (C), Merrill Lynch (MER), Goldman Sachs Group (GS), Morgan Stanley (MS) So far, the very top tier of investment banking -- Goldman Sachs Group (NYSE: GS) and Morgan Stanley (NYSE: MS) -- have been relatively unscathed by asset write-downs. But that could change because both of these super blue chip banks have a huge exposure to Level 3 assets as a percentage of their total capital. If these firms end up taking big write-downs, their boards might start to ask questions about their CEOs too. Level 3 assets are securities held on banks' books for which there is no market value -- they're marked to market. I calculated that seven leading banks have a total of $413 billion worth of Level 3 assets which exceed their total capital of $398 billion. Level 3 assets are at the heart of the subprime mortgage meltdown. How so? These investment banks held onto subprime mortgage backed securities (MBSs) and collateralized debt obligations (CDOs). These so-called asset-backed securities are bundles of loans – e.g., credit card receivables, mortgages, auto loans, leveraged buyout loans.