There is not enough revenue and that in turns makes a short fall in the ability to pay the bills and keep every thing else in check.
No one is buying the CD's, or there cashing out, one cause every one is scared, or two they need the money to live due to being unemployed or three want there money in a safer place, feds or no feds. Would you trust the goverment, granted they have been there so far. The cdo's that institutions bought are now being bought up by the feds to prevent forclosure on whats left of the CD holders and to stabilize the market so that people will buy the CD's again from the banks. The banks and institutions holding those assets are now out the revenue from those CDO assets (bonds)they once held and are using there capital to reset the subprime loans comming due in the market at a much lower rate, again another hit on revenue, and setting up another shortage in capital to reset those loans and pay the bills.
The bank has limited choices as to were they can get there capital now. The feds have got there hands full buying up CDO. No one wants to by the CD or the CDO of any new offerings on any new entity that could be offering them. The banks only have depositers money to work with and people are using there savings to keep them selfs fed and clothed while alot of them have lost there jops. That means the banks have to keep a bigger cushion if the depostiters should want there money and that is why the thrift closed them down.
The bottom line is a broken asset that dosn't produce much in the way of revenue is not worth much on the open market. I my self never use assets as a way to value a company, but I will use companies earnings to value an asset. Now that is not to say that there are times after a depretiation right down that an asset is not worth less on the financials then what the street is willing to give, but again it is often an asset that is totaly writen down over many years to zero that is under valued.
They sold the assets and have now filed that they have four million dollars of assets and a 150 million in liability in a chapter 11 Bankrubtsy filling now the only thng that could of happened is that they own four million in undervalued shares of One west that are counted as assets. In other words FFED has become a holding entity of Onewest shares and in time will become the parent for One West or a subsiduary or just a holding company. That is a real long shot if the assets are worth what they claimed they are worth in the financials but most times they go high in the financials on the assets to keep the bond holders from demanding payment and from jumping ship.
I bought a stock one time that the assets were listed higher then the liabilities but the company couldn't pay there bills. The assets sold for half of what they said they were worth in the financials.
Williams Communication was the said company. You can still look at the financials under the SEC and you will see what I'm refering too.That fiber optic junck didn't go for nere what they had spent on it and now Level III communication got it for a song or maybe not after they to went in to chapter 11 and took out there common share holder. William Communications traded for a long time at $.o1 before it died.
Don't fall into the asset trap in valuing a company unless your in the realistate business and realy know something about what a companies none performing assets are realy worth on the open market and you know that they have been depreciated of the books.
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