Banks By Mkt Cap 2009 Vs 2007+

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Information about Banks By Mkt Cap 2009 Vs 2007+
Business & Mgmt

Published on January 27, 2009

Author: davenelsen

Source: slideshare.net

Description

Now I'm even madder about the $700B!!!

The Following Slide Makes Me Mad!!! American taxpayers have just had to bail out several big investment banks, the largest insurance company (AIG), and a gaggle of regular banks to the tune of $700 billion! Why? Because they created/sold/bought some really complicated sub-prime mortgage derivatives (CDOs and CMOs) that nobody understood, not even them. Pity the stockholders -- the following slide attempts to show how much market value they’ve lost (see next).

American taxpayers have just had to bail out several big investment banks, the largest insurance company (AIG), and a gaggle of regular banks to the tune of $700 billion!

Why? Because they created/sold/bought some really complicated sub-prime mortgage derivatives (CDOs and CMOs) that nobody understood, not even them.

Pity the stockholders -- the following slide attempts to show how much market value they’ve lost (see next).

Banks: Market Cap (the Original Slide) Morgan Stanley RBS Deutsche Bank Credit Agricole Societe Generale Barclays BNP Paribas Unicredit UBS Goldman Sachs Santander Citigroup JP Morgan HSBC Market Value as of Q2 2007, $Bn Market Value as of January 20 th 2009, $Bn While JPMorgan considers this information to be reliable, we cannot guarantee its accuracy or completeness Source: Bloomberg, Jan 20 th 2009 Credit Suisse 49 120 76 67 80 91 108 93 116 75 100 116 255 165 215 16 4.6 10.3 17 26 7.4 32.5 26 35 27 35 64 19 85 97

So Why Am I Mad??? This chart was created by JPMorgan (one of the banks included). It’s misleading in a way that shows basic lack of understanding of numbers. The underlying math is just wrong! By the way, this is their PowerPoint template I’m typing in. According to the File Properties , it’s their “Pitchbook A4 template - PitchPRO v2.2.0” (sounds like they have a lot of pitches). According to the note on the previous slide, this slide was reviewed and then publicized by Bloomberg , giving it “legitimacy”. Does the Press even look at what it propagates? These are the financial titans and watchdogs we rely on??? Is anyone out there awake?

This chart was created by JPMorgan (one of the banks included). It’s misleading in a way that shows basic lack of understanding of numbers. The underlying math is just wrong!

By the way, this is their PowerPoint template I’m typing in.

According to the File Properties , it’s their “Pitchbook A4 template - PitchPRO v2.2.0” (sounds like they have a lot of pitches).

According to the note on the previous slide, this slide was reviewed and then publicized by Bloomberg , giving it “legitimacy”. Does the Press even look at what it propagates?

These are the financial titans and watchdogs we rely on???

Is anyone out there awake?

Here’s the Math Assuming the actual numbers are right (a big assumption given the industry’s recent track record), look at the Citigroup graphic. The ratio of $19B to $255B is approximately 13:1. Figure 1 illustrates this ratio via a single dimension (height). Figure 2 shows the same ratio using two dimensions (area). In Figure 3, we get a sense of how JPMorgan confused the concepts. Figure 4 shows that it’s roughly a 27-fold error (relative areas). Citigroup 255 19 Citigroup 255 19 Citigroup 255 19 Fig. 1 - 13:1 ratio Fig. 4 - 27:1 misrepresentation Fig. 3 - JPMorgan illustration Fig. 2 - 13:1 ratio

Assuming the actual numbers are right (a big assumption given the industry’s recent track record), look at the Citigroup graphic.

The ratio of $19B to $255B is approximately 13:1.

Figure 1 illustrates this ratio via a single dimension (height).

Figure 2 shows the same ratio using two dimensions (area).

In Figure 3, we get a sense of how JPMorgan confused the concepts.

Figure 4 shows that it’s roughly a 27-fold error (relative areas).

Banks: Market Cap Morgan Stanley RBS Deutsche Bank Credit Agricole Societe Generale Barclays BNP Paribas Unicredit UBS Goldman Sachs Santander Citigroup JP Morgan HSBC Market Value as of Q2 2007, $Bn Market Value as of January 20 th 2009, $Bn (Misrepresented) While JPMorgan considers this information to be reliable, we cannot guarantee its accuracy or completeness Source: Bloomberg, Jan 20 th 2009 Credit Suisse 120 76 67 80 91 108 93 116 75 100 116 255 165 215 4.6 10.3 17 26 7.4 32.5 26 35 27 35 64 19 85 97 49 16

Banks: Market Cap (Corrected) Morgan Stanley RBS Deutsche Bank Credit Agricole Societe Generale Barclays BNP Paribas Unicredit UBS Goldman Sachs Santander Citigroup JP Morgan HSBC Market Value as of Q2 2007, $Bn Market Value as of January 20 th 2009, $Bn (Misrepresented) While JPMorgan considers this information to be reliable, we cannot guarantee its accuracy or completeness Source: Bloomberg, Jan 20 th 2009 Credit Suisse 120 76 67 80 91 108 93 116 75 100 116 255 165 215 4.6 10.3 17 26 7.4 32.5 26 35 27 35 64 19 85 97 49 16 Market Value as of January 20 th 2009, $Bn (Honestly Represented)

Is it Really a Big Deal??? It is to me! Neither the banks nor the Press apparently learned anything last year. I want my $700 billion back! Dave Nelsen (Entrepreneur, Republican, Taxpayer, Parent, dave@get121.me)

It is to me!

Neither the banks nor the Press apparently learned anything last year.

I want my $700 billion back!

Dave Nelsen

(Entrepreneur, Republican, Taxpayer, Parent, dave@get121.me)

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