I guess another way to stop the bleeding is just to stop valuing assets.
Merrill Lynch & Co. said so-called Level 3 assets climbed 70 percent in the first quarter, as the largest U.S. brokerage reclassified commercial mortgages and other assets as hard to value.
Merrill’s Level 3 assets, the firm’s most difficult to value, rose to $82.4 billion as of March 28 from $48.6 billion at the end of December, according to a regulatory filing today. The New York-based company’s ratio of Level 3 to total assets rose to 8 percent from 5 percent.
As the article goes on to discuss, these so-called “level 3” assets have continued to spike across the street, including at places like GS, which is well known for having very large private equity interests – a major component of its’ level 3 exposure.
One should note that among the $82.4 billion at MER includes a 20% stake in Bloomberg – in other words it is not all toxic hard-to-hold paper.
Though enough of it probably is that I keep holding SKF as an insurance policy as there are surely some shoes plummeting from far above just waiting for an unsuspecting chart-following optimist.
But nevertheless I am keeping the positive hat on another day.