Thursday, December 11, 2014

* Citigroup (C) - "Unobservable & Significant" Liabilities Now Stand at One-Quarter $Trillion (One Chart)

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Do this analysis yourself with the click of mouse button: Capital Market Laboratories

Banks have three levels of assets and liabilities. Levels one and two are observable and therefore can be marked-to-market accurately (real market prices). Level three is unobservable yet significant to the valuation of the asset or liability. Some might call it, "mark-to-model."

If we plot all banks in the United States with market caps > $5B and then look at the cash ratio on the x-axis and the level 3 liabilities on the y-axis, we are left with one question: What the hell is going on with Citigroup?

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