Happy Hour Vid: How Does Repo 105 Work?

John Hudson 11 Views Mar 16, 2010
Last week, a formerly obscure accounting trick called "Repo 105" surfaced into the mainstream following a bank examiner's report. The report revealed that Lehman Brothers was insolvent weeks before it filed for bankruptcy, but few noticed because it hid $50 billion of troubled assets using this particular technique. How does this arcane trick work? Marketplace senior editor Paddy Hirsch breaks out the whiteboard to clear things up:

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