I see that BofA has "written down"...

[Bigmack]

$104B, and Citi has written down $147B. And other banks likewise.

I know that's from bad loans and securities.

http://uk.reuters.com/article/idUKLDE6B11KI20101202

But what does that mean? Do those banks have enough assets to cover that kind of loss? What does that do to their balance sheets. I know enough to say the words and what they mean, but I don't know enough to understand the effect of those losses.

Are those banks solvent... as a layman would understand the word?

[PDJane]

1. No. They're Zombie banks,

And they are stealing assets....most notably, houses, whether they hold the paper or not.

[villager]

2. and like other zombies, they prey on the living...

n/t

[dixiegrrrrl]

3. "Do those banks have enough assets to cover that kind of loss"

If they say so, they do.

All they are doing is admitting that bonds, mortgages, loans, etc they had been holding onto and claiming 2005 prices are now being claimed at 2010 prices.ie: LESS value than the banks insisted on.
Both prices are ...imaginary. The word they use is.."notional".

remember, bank "assets" is a term for "debt".

So I think you are asking, do they have REAL money to cover the losses.
since their accounting system is basically rife with fraud, no body knows.

They are trying to get rid of bad debt and show they have some real money, mostly what the government gave them,
from our tax dollars.
You will notice that they are counting the real bad debt from the banks and mortgage companies they gobbled up over the last few years: countrywide, Lehman Bros. etc.
Keep in mind that Wikileaks just came out with a revelation that all the major banks have been insolvent at least since 2008. The push since then has been to "re-capitalize"...throw out the shit, or sell it, and try to get
good stuff in return.

Remember the Forbes story is about ESTIMATED losses.
If I tell you my 1993 clunker is worth 50,000, but I will sell it to you for 40,000, that is a 10,000
"estimated " loss, but in reality the clunker is worth maybe 1200.00 blue book.

The only time the banks count real money is when they give out the bonuses, but a lot of bonus money is stock value.

[notesdev]

4. Dead banks walking

These banks (the "too big to fail" group, or "TBTF") are so far in the hole that there's no question they will go down, the only question is how much their execs can steal from the public and from the Treasury as they do.