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Toxic assets

RECENT NEWS
US Treasury to sell US$142b worth of toxic assets
The Straits Times  Mar 21  Comment 
WASHINGTON - THE US Treasury Department on Monday said it would begin to sell-off toxic assets worth an estimated US$142 billion (S$179.8 billion), in an effort to close another chapter of the financial crisis. 'We will exit this investment at a...
EXCLUSIVE - Citi may hold back toxic assets in unit sale
Reuters  Jan 29  Comment 
Citigroup Inc is open to holding back some toxic assets in a bid to get the most value from the sale of its consumer finance business, CitiFinancial, sources familiar with the situation said.
WestLB at risk over inflated toxic assets
Financial Times  Nov 5  Comment 
Europe’s top competition watchdog says that the troubled bank would have to take additional restructuring steps to compensate or the aid – put at €3.4bn – would have to be recovered
U.S. seizes 3 wholesale credit unions, unveils plan to manage $50 billion in toxic assets
MarketWatch  Sep 24  Comment 
U.S. seizes 3 wholesale credit unions, unveils plan to manage $50 billion in toxic assets
Hypo Real Estate to shift toxic assets in Q4
Reuters  Aug 13  Comment 
Nationalized German lender Hypo Real Estate , which failed a pan-European stress test in July, expects to complete the planned move of around $270 billion of toxic assets into a "bad bank" during the fourth quarter.
Citi Executive to Retire After Cutting Toxic Assets
New York Times  Apr 30  Comment 
Citigroup said Richard Stuckey, named in January 2009 to oversee $241 billion of the bank's most troubled mortgages and bonds, would retire later this year after cutting the toxic asset pool nearly in half.
Toxic Assets Market Awaits Rebound
NPR  Mar 18  Comment 
During the peak of the housing market, the value of the mortgages that got stuffed into those complicated mortgage bonds known as toxic assets was more than $3 trillion. But now the market has stalled, in part because many sellers are waiting for...
Disparity in default rates of toxic assets
Financial Times  Mar 11  Comment 
At-risk European structured products should not have been tarred with the same brush as their US equivalents
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 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.




more ▼WIKI ANALYSIS
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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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