In the FT today, it’s been reported that there are huge amount of loans awaiting syndication globally.

What’s more it’s mainly in Europe where we have the problem at $342 billion and US making the figures up with $183 Billion according to Dealogic, the data provider.

Our major problem is that these loan/mortgage books are actually selling for less than the amount lent. The average bid price currently for european leveraged loans has fallen to 96.23 and 94.88 for the US loan books - well below the par value of 100. And if you add the origination costs of say a conservative 3% then the current losses on the $552 Billion is approximately 7.5%.

By Trumpo’s basic calcuation we have another $41 Billion of losses to follow. Which banks are going to have to absorb these $41 Billion losses? Trumpo thinks it would make a great TV programme, maybe we should have a TV programme whereby Trumpo (no relationship to Trump) poses the questions to CEO’s of Banks and allows them to say to themselves “I’m fired!”

Ouch….

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