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Toxic Assets

RECENT NEWS
Citi results will reflect toxic assets, one-time payments
The Globe and Mail  Jan 18  Comment 
Expect a loss of 26 to 39 cents a share. Why are analysts still bullish?
FDIC sells toxic assets in public-private fund
MarketWatch  Jan 8  Comment 
The Federal Deposit Insurance Corp. sells $1 billion of troubled commercial real estate loans from 22 failed banks in distressed markets to a combined public-private fund, where the agency still maintains a majority stake in the assets.
PPIP May Have INCREASED the Amount of Some Toxic Assets
George Washington's Blog  Jan 4  Comment 
In March, I pointed out that: PPIP [the Public-Private Investment Program] is a massive wealth transfer from taxpayers to investors and banks, and that Treasury funds are being used to sidestep Congress and their constituents - the American...
US studies banks’ handling of toxic assets
Times Online  Dec 30  Comment 
Regulators in the United States are investigating arcane financial instruments sold by Wall Street during the economic crisis amid accusations that banks duped investors into betting on toxic mortgage assets.
US investigates sale of toxic assets
The Australian  Dec 29  Comment 
US regulators are investigating arcane financial instruments sold by Wall Street amid accusations that banks duped investors.
US studies banks’ handling of toxic assets
Times Online  Dec 29  Comment 
Regulators in the United States are investigating arcane financial instruments sold by Wall Street during the economic crisis amid accusations that banks duped investors into betting on toxic mortgage assets.
Treasury Bestows Veto Power To New Agency To Monitor RBS' Toxic Assets
Banking Business Review  Dec 8  Comment 
To reduce taxpayers exposure to bank losses
Marathon toxic assets program approved
Sydney Morning Herald  Nov 30  Comment 
The Treasury Department said on Monday that another large investment company has raised sufficient capital to join the government in buying toxic bank assets.
U.S. Treasury to say 2 more firms to buy toxic assets
Reuters  Nov 3  Comment 
The U.S. Treasury Department on Tuesday announced two more funds have met requirements to get government financing that that will let them begin purchases of banks' so-called toxic assets.
US banks gain from rally in toxic assets
Financial Times  Oct 18  Comment 
US banks such as Citigroup and JPMorgan Chase have earned billions of dollars from their “toxic” portfolios in the past three months as a rally in some of these distressed assets enabled them to book accounting gains or sell them



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more ▼WIKI ANALYSIS
This article is part of WikiProject Definitions. Consider editing to improve it. View articles referencing this definition.
 

Toxic assets are assets for which the market has significantly plummeted. Toxic assets value is so uncertain that there is no functioning market for them (i.e., they're illiquid), and what market there is provides bids much lower than the holder is asking. A prime example is real estate that's value has declined well below the value of the mortgage.

Sale under these conditions (i.e., at a low bid in an illiquid market) would form a comparison point for mark-to-market writedowns of similar assets, which in turn could cause breech of regulatory requirements or loan covenents. Hence, the toxicity part of toxic assets is in part derived from the secondary effects of selling them.

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