August 23, 2007

Want to see which banks of mortgage lenders may fail first? Well, here you go..


When you don't adequately set aside loan-loss reserves (helloooo - is anyone auditing these companies?) you get into a heap of trouble right quick.

WaMu - you're next...




29 comments:

borkafatty said...

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I said this many many moons ago..it is not a housing problem...it is the Hedges....non the less those Option Arms and IO-Arms have not helped the situation either..Sub-Prime is just a scapegoat for the MSM and the big boys on slick street AKA Wall Street....

http://www.koreatimes.co.kr/www/news/opinon/2007/08/137_8759.html

Anonymous said...

Nice to know the future before it happens

Anonymous said...

WASHINGTON (Reuters) - The Federal Deposit Insurance Corporation said on Wednesday delinquent loans at U.S. banks jumped 36 percent to $66.9 billion in the second quarter, the biggest quarterly increase since 1990, largely fueled by unpaid real estate loans.

Here's a concept. What if Jet Copter Ben and pals lower the discount rate that they charge banks to borrow from the Fed while raising the overnight rate that banks charge each other? The weaker banks may have no choice but to consolidate with the strong. Consolidation of the weak with the strong may limit losses. Remember, their dollar drop Bernanke and pals' job is to try to make sure the FDIC doesn't have to pay a claim. They do not work J6P.

Smug Bastard

alan's butt boy said...

Keith, how much more proof do you need that the fix is in? The Fed will cover for any big institution that feels pinched. Your notions of fairness and self-correcting markets are naive. If we had any justice in this system, interest rates would be 15%, and banks would be closing left and right. They aren't because Wall Street is one giant programmed trade. It spits out $billions in commissions and fees for the guys who run it. In-duh-vidual investors get the back of the hand on good days, and bitch slapped if they dare to try and play with the big boyz.

So go ahead and wait for your crash - it ain't gonna happen as long as Bernanke and Paulson are in charge!

SPECTRE of Deflation said...

I know the FED is taking boat loans, so when can we all get our money back on those beautiful LG washers and dryers,you know the ones I'm talking about in candy apple red, that ran 3K with the whiz bang attachments? I mean there are people out there hurting I tell ya, and the FED must open up the FED PAWN SHOP WINDOW!

guy n. cognito said...

http://www.readexpress.com/pollcenter.php

poll question at the Washington Post's free daily asking about a FedGov bailout of the mortgage industry. feel free to say h*ll no.

wawawa said...

Some banks name are printed on Bold character, what does it imply?

RE Investor said...

Anyone that honestly believes that Wells and B of A will go under just better not have a short position in either one. They have healthy balance sheets, and probably are one of the best buys in the banking arena now. They will take losses, but not enough to make either one do more than stumble for a quarter or two. I could be wrong, but like I said, I would not short. The mortgage co's however - Indy, Novastar, etc. they may not go under, bought I see buyout - cheap.

gt said...

i dont get why it says countrywide as being in my alexandria va, arent they hq'd in calababsbsbs?

amigauser said...

how can banks fail, when the fed will bail out any in trouble.

Keith, I thought you would have learned that the markets are rigged, so that financial instutions will profit privately, whilst losses will be socialized.

stock markets up
interest rates down

ARM borrowers will now be able to get a low cost fixed interest rate, this will then bail out the housing market.

How long before the housing market begins to increase in value?

Do you really think that the housing market will be allowed to collapse in the year before the election?

Has the last 10 days not taught you anything?

Ron said...

"Nice to know the future before it happens"

It is amazing how this works, inspectors on things like bridges find problems...then the cities fix said problems and tragedy avoided. People investigate and look at facts before going into long drawn out war, war avoided and propaganda quashed. Regulators look at banks and mortgages and find these insane lending practices and stop toxic loans out the gate as fiscally irresponsible and a ponzi scheme...this could also be applied to the Social Security system as well. Just imagine how many things we could fix, with people watching and investigating these important things....we could see the future and change it!

keith said...

Bold = possibly going out of business because they don't have sufficient reserves to cover their loan losses

Anonymous said...

After reading Bloomberg's today, you might want to add Bank of China to that list. They just fessed up to having a significant exposure to US sub-prime mortgage debt. Makes one wonder what their exposure is to "non sub-prime" mortgage debt in the U.S. That's a lot of yuan riding on those bets and the Chairman is not going to be happy with Sum Yung Guy if those investments tank. Can you say "firing squad"? Paulson is probably telling the Chi-Com's "whose yo' daddy?" hAHAHAHAHAHA
This is just like the seniors in high school hazing the incoming freshmen - welcome to capitalism, my comrade chumps. I just hope a war doesn't break out over bad debts.
Smug Bastard

SPECTRE of Deflation said...

RE Investor said...
Anyone that honestly believes that Wells and B of A will go under just better not have a short position in either one. They have healthy balance sheets, and probably are one of the best buys in the banking arena now. They will take losses, but not enough to make either one do more than stumble for a quarter or two. I could be wrong, but like I said, I would not short. The mortgage co's however - Indy, Novastar, etc. they may not go under, bought I see buyout - cheap.

August 23, 2007 3:48 PM

Sceaming buys...ROFLMAO!! Their borrowing at the discount window at a premium of 1.25% does nothing but instill confidence that they will be around for at least the next two weeks. LOL!

Anonymous said...

World Savings ONLY makes bad loans, i.e. option arms.

If I remember correctly they limit most to 80 loan-to-value so they may be able to absorb losses related to fc's.

Just a thought.

Anonymous said...

Hmmm.....

I seem to recall saying WM is a $2 stock waiting to happen.

Anonymous said...

Don't worry about the Chi-coms they are on their best behavior for the up coming Olympics!

After that, watch those lil rice propelled bastards go!

Bung Ho!

Anonymous said...

*





......you want flied lice wit dat?

Anonymous said...

Ron said...

People investigate and look at facts before going into long drawn out war, war avoided and propaganda quashed.

Everything is a quick easy fix. WMD arguement is so tired. Let's hug it out with the terrorists. Will get Jeremy Pivin to set them straight and then they all can go to the Playboy mansion together and there will be no more 9/11 or suicide bombing for inexperiened virgins.

8/10 mosques in the USA are funded by Saudi Arabi

My money ain't in there said...

That Regions Bank just absorbed another Alabama bank. I do not know if the absorbed bank had reserves issues or not but I suspect there was trouble and the FDIC did what their website says they will do which is quietly have the troubled bank absorbed by another.

I wonder if there is an infusion of FDIC cash as part of the deal?

Ron said...

Everything is a quick easy fix. WMD arguement is so tired. Let's hug it out with the terrorists. Will get Jeremy Pivin to set them straight and then they all can go to the Playboy mansion together and there will be no more 9/11 or suicide bombing for inexperiened virgins.

8/10 mosques in the USA are funded by Saudi Arabi


Ramble much? So you are saying there was WMD, that Iraq was a big threat who couldn't beat their neighbor Iran in a war? But us across the sea were in dire straights if they continued to exist? Yet in the end you say Saudi's are 80% of the terrorist, oh those darn Iraqi err Saudi terrorists! Make up your mind!

I agree with Condi Rice, and Colin Powell and Dick Cheney on this subject. Prior to 911...then they went for a power grab unparalleled before - which turned out to be the largest blunder in human history...well played Bush er Rove.

Cheney:
http://tinyurl.com/3d6x5b

Condi and Powell:
http://tinyurl.com/2528e

And because you just might not have the drive to cut and paste, since your drive to find facts looks lazy at best...another propaganda lover or talk radio zombie.

Powell:

(2001)"He (Saddam Hussein) has not developed any significant capability with respect to weapons of mass destruction. He is unable to project conventional power against his neighbors."

Rice:

(2001)"Saddam does not control the northern part of the country," she said. "We are able to keep his arms from him. His military forces have not been rebuilt."

Truth is a bitch hunh? I bet you feel stupid and duped now....naw just kidding your belief in fairy tales and propaganda can't be quashed with something as simple as facts....have a nice life being duped over and over again.

Captain Ned said...

In my day job I'm a state bank regulator. One of the biggest issues we've had lately is a war between the IRS, SEC and accountants on one side and bankers and regulators on the other. The topic: Allowances for Loan and Lease Losses.

The IRS (led by the SEC) has argued for years that banks have way too many $$ stuck in their loss reserves. Since bad debt expense is tax-deductible, the IRS is clearly looking to generate additional taxable income. The SEC hates large loan loss reserves because they believe banks use them to smooth earnings over time (over-reserve when credit is good, under-reserve when it's bad). Accountants, led by the AICPA (American Institute for Certified Public Accountants) believe the whole allowance calculation to be so irretrievably subjective that it should be abolished and loan losses should be a direct deduction from current period earnings.

Regulators, OTOH, feel differently. After all, our mandate is to evaluate risk to the insurance fund. The more reserves in place, the less risk. Unfortunately, the IRS/SEC/AICPA won the last round of negotiations, essentially requiring examiners to cast a gimlet eye at loan loss reserves that cannot be justified in terms of recent loss history. Given the past 7-10 years there is no loss history, so we're supposed to tell banks to cut back. This regulator reads all the right blogs and does not tell bankers to cut back on their reserves.

Anonymous said...

Does anybody know if Chase is laying off mortgage brokers?

Anonymous said...

Why are all these fucking liberal pukes calling for a bailout of Wall Street?

Anonymous said...

While we've all been worried about inflation, deflation might turn out to be the form of the destructor.

I don't understand economics enough to predict this, but, if assets lose value, due to lowered demand and many loans don't get repaid, doesn't that lower the amount of M3 currency?

Homes said...

It's one good thing to see the future.

What will you do then, me I'll but home early

Anonymous said...

Thankyou Captain Ned.

That is CRAZY for banks to cut reserves.

Anonymous said...

-------Why are all these fucking liberal pukes calling for a bailout of Wall Street?------


Yes, Bush and the feds policy of bailing out large corporations has something to do with liberals.

You seem sharp.

Doug said...

Yes thanks Capt. Ned.

Re. the bolded banks, didn't World Savings recently get acquired by (relatively strong) Wachovia?

With a lot of my money in CDs spread around a lot of banks to stay under the archaic FDIC limit, I find myself in the uncomfortably position of having CDs in two of the bolded banks on the list. Heh, well at least I didn't renew my CD with CountryWide last March, handwriting was on the wall.

I guess I am really at the mercy of the FDIC should we start to see bank failures. Wonder how long it takes them to pay depositors off? Most likely the gov will try to get failing banks acquired by stronger ones before they have to pay off. Although if a really big one like WaMu becomes insolvent...scary.