Posted on 07/26/2008 2:11:20 PM PDT by dennisw
You don’t see anyone turning away from it? I don’t see it surviving to pay anyone at all. You won’t have to turn away, the door will slam in your face.
I read the company’s press release and their actual losses on the portfolio is 2%, and considering the real estate dowturn is years old now, that’s not too bad. I have to wonder why they are provisioning for a 90% loss. My guesses are tax purposes, or they want to pad their earnings in the future.
I think they were sold as AAA, which means pretty close to zero risk of default. Other types of risks aren't covered by the AAA rating. AAA rated securities can go way down in value, but its not supposed to be because of defaults in the underlying pool.
As far as the American banks go, its hard to tell. Some have been taking some big kitchen sink write-downs, but probably not all. Toward the end of the 1990-91 session, the surviving banks had overdone some of the markdowns and were able to book recovery markups. You're probably right that not everyone has come clean.
I thought it might have been Orange County. Thanks for jogging my memory.
Ping.
If we try to print our way out if this, we're gonna piss off a lot friendly Nations!
Was it Norway? Where Wall St. wiped out an entire town with this stuff.
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