A look at “Repo 105,” a series of transactions that Lehman Brothers is alleged to have used to make its balance sheet appear stronger.
- Text: Dan Wilchins, llustration: Silvio DaSilva
Most binges are followed by hangovers, and so the takeover boom earlier this decade is likely to translate into some hefty goodwill impairment charges for major European companies, as they mark down the value of assets bought when the party was in full swing.
This graph, lifted from a new report by Houlihan Lokey, shows the proportion of companies in each sector of the DJ Stoxx 600 index that have a book value of equity at least 10% above their market capitalisation. The bigger the dark blue line, the worse shape the sector is in – step forward autos, banks, insurers, other financial institutions, and real estate-companies.