2007 was the year when Wall Street acquainted you with a host of new terms ranging from CDOs, SIVs and RMBSs among many others. One of the more common ones, which you can read about in the news every day, is “write-downs,” which is simply another way of saying ‘losses.’ However, it sounds so much more sophisticated when a company announces some $8 billion in write-downs as opposed to saying we lost $8 billion with Subprime investments gone bad, don’t you agree?
Good news! Now you can elevate yourself to that same level when discussing personal issues with friends at a party or with your better half. It is bound to surround you with an aura of distinction and sophistication. Kevin Depew of Minyanville shares his experience of how he integrated this term into his lifestyle:
Late night I was forced to disclose more than $1,275 in additional writedowns tied to the subprime mortgage mess, and the failure of certain horses to run as expected at Aqueduct, including the collapse of the 8 horse in the 9th race despite having a three-length lead in deep stretch. I mean, who gives up that kind of lead in deep stretch? The horse was literally running backwards in the final furlong!
Investors, meaning “my wife,” called the new writedowns “unexpected, shocking and disappointing,” especially following on the heels of writedowns last Saturday night totaling more than $500 due to the subprime mortgage mess, and Auburn’s inability to cover the spread against Georgia.
The new writedowns are taking place despite a statement released last Sunday morning where I said, “Although the ongoing subprime mortgage market issues are a concern, I am quite confident I have a pretty good grip on the situation at Madison Square Garden today where the winless Heat stand virtually no chance against a Knicks team rejuvenated by the addition of Zach Randolph.”
That statement was followed by a clarification the following day: “The ongoing conditions in credit markets, and last night’s unexpected three-point loss by the Knicks, may adversely impact our ability to eat dinner going forward. However,” I cautioned, “should credit market conditions materially improve, and should the track at Churchill Downs come up sloppy this afternoon, there is no reason to expect additional writedowns forthcoming.”
For a brief period it appeared I was on track for a profit. The exacta at Churchill in the 3rd race returned $213, and I had the winner of the 8th that paid $11.80. However, as the subprime mortgage market began to show additional signs of stress late yesterday afternoon, also pints of Guinness, those profits quickly evaporated.
Following last night’s disclosure of additional writedowns, investors (Hi, Honey, I love you!) called an emergency board meeting with one of her sisters to discuss my exposure to subprime mortgage products, the OTB and whether I would be able to retain control of the firm’s debit card. Meanwhile, I am still scheduled to meet this afternoon with Independent Banker, the 8 horse in the 7th at Churchill (seriously!), who is listed at 15-1 in the morning line. However, the possibility of additional writedowns related to subprime mortgages, and the difficult outside post given Churchill’s one-turn mile, cannot be completely ruled out.
Comments 1
Now what would be really interesting is if Mr. Depew could go down to his local bank branch and “bid” on a below market rate loan to replace the money he lost.
Now that would indeed be good cocktail party conversation.
And I already know who you would find at that party: people with names like Paulson, Bernanke, and Mizillo.
G.H.