Frenzy
April 23, 2008 – 8:14 amThe frenzied pace of the banks’ risky subprime loan proliferation and leveraged loan buyout underwriting of the credit bubble has been matched only by the panicked pace of distressed asset selling and outright begging for cash as the shock wave of the burst hits. The New York Times writes:
The world’s biggest banks are rushing to raise cash after reporting $290 billion in asset writedowns and credit losses since the beginning of last year.
Some of those who raised cash along with the amount raised so far are
- Bank of America
- Citigroup ($6 bllion via bonds sale)
- JPMorgan Chase ($6 billion via the stock offering)
- Merrill Lynch, ($12.8 billion)
- National City ($2 billion)
- Royal Bank of Scotland ($24 billion via rights issue)
This will continue, along with the write downs. In fact these cash infusions (capital sales) are basically the ultimate consequence of the write-downs. Shareholders ignore them at their own peril.
