Toxic assets

Toxic assets are assets that are difficult to sell and have rapidly declining market values. For example, if a person buys a property for $1,000,000 and later finds that the property is part of a hazardous waste dump, the property will be impossible to sell and likely has no residual value. Businesses may attempt to hide the nature of any toxic assets they are holding; otherwise, they might report a vastly lower or negative equity position.

The term was commonly applied to the credit default swaps and similar instruments that rapidly lost value during the recession that began in 2008.