This is a guest post from Todd Harrison, CEO of Minyanville.
“Up is down, down is up, he says hello when he leaves and goodbye when he arrives.” – Jerry Seinfeld, in a Bizarro World
This past spring, when men were men and sheep were nervous, we assumed a constructive stance on the financials. It was a rapid departure from our multi-year stance that many of the world’s largest financial institutions were not only extremely vulnerable, they were technically insolvent if Level III assets were properly accounted for on their balance sheets.
While the financial fabric was frazzled and frayed, a who’s who in the banking industry — from Citigroup (C) to Morgan Stanley (MS) to Bank of America (BAC) to Wachovia (WFC) to Washington Mutual (JPM) — wrote down massive amounts of toxic assets. It became a commonplace occurrence; the question wasn’t one of “if,” it was simply “how much?”