>Do they simply assume a percentage reduction below book value or is it more of a valuation process? How "real" is the idea that BNB has negative equity?
Image a number, a low number agreeable by the bankers, the auditors and the directors ...
An exercise like this will be awash with red ink.
The reason I am happy to hold BNBG's is because I don't think the current asset deflations we are seeing will last more than 6 months.
The Fed is pumping cash into the system with the 0 - .25% fed funds rate. Treasury is inflating it's balance sheet to $1.4 trillion. These guys will stimulate until they see some growth!
The problem we will be worried about in the 2nd half of 2009 will be inflation!!
Maybe a short burst of hyperinflation would be good for BNB to burn off those bank debts! (Not good for anyone else, though).
BNB
babcock & brown limited
>Do they simply assume a percentage reduction below book value...
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