17 2552

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* .. 50

* .. 50

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* Emerging Markets

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* Bank insurance

*Assets LiabilitiesEquitySubprime LoansCDOsOther LoansAnd Inv Products

Hedge Funds

Investment Banks

Banks Balance sheet

Bond Insurers

Insurance Households .

*U.S. Capital Market in DistressSource:Moodys Economy.com, Mortgage BankersAssociation, MarkitABX 06-2 price seriesRISKS REVEALEDASSETS RE-PRICED

2.

Source: Global market monitor, IMF, 24 June 2009. Lehman Brothers

Quarterly Banking Update FDIC

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Chart1

4

0

0

3

4

3

3

3

4

5

3

6

10

5

8

7

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24

15

Sheet1

2004200520062007H1 2008Jul-08Aug-08Sep-08Oct-08Nov-08Dec-08Jan-09Feb-09Mar-09Apr-09May-09Jun-09Jul-09Aug-09May-09Jun-09Jul-09

40034333453610587924157919

*European Banks Are Exposed to Further Large Losses in Eastern European Countries ($1.5 Trillion)

* Rating AgenciesOther Financial Services

3.

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* -

*

Chart1

3.1

1.7

1.5

0.3

7.3

4.2

2.9

1.8

World

GDP Growth 2010

Sheet1

World

World3.1

Japan1.7

US1.5

EU0.3

Developing Asia7.3

Middle East4.2

Latin Am2.9

Cen. & East. Europe1.8

To resize chart data range, drag lower right corner of range.

*

* - Securitization OTC Products Off Balance Sheet - FDIC

* Opportunity to buy

*Goldman Sachs

*HSBC Holdings plc

*

*Hong Kong Stock Exchange and Clearing

*Bank of America

*CitiGroup

*

*****Rising sub-prime default rateweakened economyoverly aggressive lending to those who cannot afford the debtowners no longer see their home rising in valueARM reset contributing to this rise, most resets occurring in 2007 and 2008 (i.e., now)current legislation contemplates some rescue, although not likely to be broad-based nor a huge help to the economyWeakness in sub-prime asset pricesweakened fundamentals; cash flow likely to miss expectations (we see this with vintage year default rates)underwriting more lax than was though; rating agency issuesfalling estimates of value that can be recovered from home sale due to previously mentioned falling home values************