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Can You Spell U-N-D-E-R-R-E-S-E-R-V-E-D? If Not, Here Is A Visualization Aid

Tyler Durden's picture





 

Following today's news of an imminent lawsuit to be filed against Bank of America by such entities as the New York Fed (which, by the way, it had to do, and not voluntarily, but merely as a function of its fiduciary duty to taxpayers through its Maiden Lane holdings, managed, conveniently enough, by Bank of America minority holding BlackRock) everyone promptly has taken a quick look back at the bank's earnings presentation, and especially one little piece of data: the putback reserve. Taking a quick look a page 23 on the pdf we read: "3Q10 reps and warranties provision of $872M is $376M lower than 2Q10, as the current quarter included an increase in expected repurchases from GSEs while 2Q10 included additional provision for monolines." So how does this stack up relative to the $47 billion in putback demands by such legal "dilettantes" as Bill Gross, Bill Dudley and Larry Fink? We have created the chart below to assist in that particular question. We are also confident that with each passing day we will have to add to the red-shaded area as more and more putback lawsuits come out of the woodwork. And as to where the deficiency amount will have to be funded from? Think cold, hard cash. The same cash that until recently would have been on the "sidelines."

 


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Tue, 10/19/2010 - 16:43 | Link to Comment Sausagemaker
Sausagemaker's picture

Looks good to me. Nothing to see here. Move along... Oh look! an iPad!

Tue, 10/19/2010 - 16:54 | Link to Comment septicshock
septicshock's picture

iPad bitchez. I'm actually typing this on mine.

I wonder how Tyler feels knowing I visit his site a hundred times a day on an iPad...

Tue, 10/19/2010 - 17:01 | Link to Comment Agent P
Agent P's picture

100 times a day???  An iPad???

You must be unemployed and at least 90 days delinquent on your mortgage.

Tue, 10/19/2010 - 17:38 | Link to Comment AccreditedEYE
AccreditedEYE's picture

+1 lol

Tue, 10/19/2010 - 17:54 | Link to Comment Rasna
Rasna's picture

That's great!

LOL

Tue, 10/19/2010 - 17:06 | Link to Comment Horatio Beanblower
Horatio Beanblower's picture

Every time you visit, please click on an ad.

Tue, 10/19/2010 - 17:13 | Link to Comment Sudden Debt
Sudden Debt's picture

TYLER!!!  USE FLASH!!!!

Tue, 10/19/2010 - 17:41 | Link to Comment Bob
Bob's picture

That would make Harry Reams blush!

Wed, 10/20/2010 - 06:42 | Link to Comment lewy14
lewy14's picture

You know, in my twenty five years online, I have never - ever - seen a use of all-caps which I deemed effective and appropriate.

Until you showed up.

The avatar makes it work.

Tue, 10/19/2010 - 18:18 | Link to Comment HarryWanger
HarryWanger's picture

Hope you didn't pay full price. You can get them below retail on ebay. Or used ones by those who bought the hype then figured out they have a fairly useless toy.

Tue, 10/19/2010 - 20:34 | Link to Comment Bananamerican
Bananamerican's picture

I had one for a week and flipped it to Ebay.

It's an ergonomic monster....a la Quasimodo

Tue, 10/19/2010 - 16:44 | Link to Comment Sausagemaker
Sausagemaker's picture

Hey is that one of the Kardashians?

Thu, 10/21/2010 - 13:25 | Link to Comment themosmitsos
themosmitsos's picture

Alot of people here with a lot of funny/stupid/goofy nicknames, but your's' made me LOL :) thx

Tue, 10/19/2010 - 16:45 | Link to Comment tecno242
tecno242's picture

red rocket red rocket.

Tue, 10/19/2010 - 17:52 | Link to Comment MarketTruth
MarketTruth's picture

It makes me think someone needs to send BoA either an:

Insufficient Funds Notice

-- or --

Bounced Check Fee
(wonder what the fee would be on bouncing such a check?)

Tue, 10/19/2010 - 16:45 | Link to Comment 101 years and c...
101 years and counting's picture

You mean, the mark to myth accounting isn't working?  Hmmmmm...

So, we can expect the same news from such firms as JPM, WFC, C, GS, etc??

When TARP 2 FAILS to pass Congress, the shit will really hit the fan.

Tue, 10/19/2010 - 16:55 | Link to Comment erik
erik's picture

Then when TARP 2 does pass Congress on the 2nd attempt, the stock market will crash just like it did last time.

Tue, 10/19/2010 - 20:38 | Link to Comment Bananamerican
Bananamerican's picture

Tarp II passes 1st Try, post election, in the same manner as the 1st...over our dead bodies.

....to "save the system" and all that.

Tue, 10/19/2010 - 17:02 | Link to Comment Reggie Middleton
Reggie Middleton's picture

With all of the yapping Ive done on JPM under reserving and there's still a doubt? Granted, they're better of than BAC...

Tue, 10/19/2010 - 17:58 | Link to Comment Rasna
Rasna's picture

TARP I passed despite the howls of outrage and specific, "don't pass this bill (TARP)" demands bythe electorate...

Tarp II will pass also...

The Congress and everyone else serves at the pleasure of Wall Street and the TBTF banks.

Count on it.

Tue, 10/19/2010 - 16:46 | Link to Comment Mentaliusanything
Mentaliusanything's picture

Thats taking gearing to a new high. But you don,t make money on self insurance

Tue, 10/19/2010 - 16:46 | Link to Comment jedwards
jedwards's picture

Isn't it likely that BAC and the other banks will just settle with Pimco, et. al. for a fraction of the amount?

Tue, 10/19/2010 - 17:00 | Link to Comment Sudden Debt
Sudden Debt's picture

I'll light a little candle for it to be so...

HECK, I'LL LIGHT 2 CANDLES!!!

Tue, 10/19/2010 - 17:38 | Link to Comment ShankyS
ShankyS's picture

That is not a candle - it is a fuse!

Tue, 10/19/2010 - 17:42 | Link to Comment TooBearish
TooBearish's picture

+1 agree - but great fun with pictures Ty!

Tue, 10/19/2010 - 17:48 | Link to Comment eatthebanksters
eatthebanksters's picture

Do you think Bill Gross will settle for a fraction of what PIMCO is owed?

Tue, 10/19/2010 - 18:05 | Link to Comment Quantum Nucleonics
Quantum Nucleonics's picture

He might.... buy at 50 cents (or whatever).  Would you, (a) settle for 55 cents after a couple months and a little negotiating time, or (b) grind it out in court for a couple years (racking up $$$ in legal) for the hope of getting par.

Tue, 10/19/2010 - 18:01 | Link to Comment Rasna
Rasna's picture

Not a chance of that happening.

Tue, 10/19/2010 - 16:46 | Link to Comment Cyan Lite
Cyan Lite's picture

Republicans will pass another TARP as soon as they take over the House.

Tue, 10/19/2010 - 16:48 | Link to Comment Careless Whisper
Careless Whisper's picture

i think mister demint (and maybe mister paul) over in the senate may have a few things to say about that.

Tue, 10/19/2010 - 16:56 | Link to Comment DarkMath
DarkMath's picture

Yes, if the Republicans even think about another bail out they are going to write a very strongly worded letter to John Boehner. 

Tue, 10/19/2010 - 16:52 | Link to Comment Shameful
Shameful's picture

Only if the lame duck dems don't beat them to the punch.  Remember both "parties" are eager to serve their banking masters.

Tue, 10/19/2010 - 17:46 | Link to Comment AccreditedEYE
AccreditedEYE's picture

I don't believe there is political will for it on either side. People in the know (who understood what was going on...and some that didn't! lol) were pissed we had the first TARP... post Dodd-Frank, people will want the institutions brought down. There is no repeats with this shit, not if you want to keep your seat.

I like Whalen's idea on the subject...

http://us1.institutionalriskanalytics.com/pub/IRAMain.asp

Tue, 10/19/2010 - 17:49 | Link to Comment eatthebanksters
eatthebanksters's picture

And then they will be gone in two years...

Tue, 10/19/2010 - 18:03 | Link to Comment Rasna
Rasna's picture

Agree.

No debate, no hand-wringing trying to get Dems on board... They'll give the Dems and everyone else the middle finger salute as they trot it over to O, who will sign it while looking for his balls.

Tue, 10/19/2010 - 18:07 | Link to Comment Quantum Nucleonics
Quantum Nucleonics's picture

Ehh, if Republicans controlled the House in 2008 there might not have been TARP 1.  It was Democrats carrying water for a lame duck President.

Tue, 10/19/2010 - 16:46 | Link to Comment Careless Whisper
Careless Whisper's picture

that is an aaa owner-occupied mortgage, dammit. and so are the other 20 miami condos that the same guy owns.

 

Tue, 10/19/2010 - 21:12 | Link to Comment SpeakerFTD
SpeakerFTD's picture

I think you meant, "so is the condo that 20 different pension funds think they own."

Tue, 10/19/2010 - 16:46 | Link to Comment Dr. No
Dr. No's picture

"Following today's news of an imminent lawsuit to be filed against Bank of America by such entities as the New York Fed"  In order to meet the reserve obligation, BofA will use the discount window.  It will exchange more toxic assets for cash to shore up its reserves.  Back door bail out.

Tue, 10/19/2010 - 16:46 | Link to Comment TheGreatPonzi
TheGreatPonzi's picture

Bofa will end up in the hands of GS or JPM in less than 3 months.

Tue, 10/19/2010 - 17:09 | Link to Comment erik
erik's picture

I vote they will end up in Govt control.  The real concern here is how quickly this will spread to Wells Fargo (Wachovia/Golden West) and JP Morgan (WaMu/Bear Stearns).

Tue, 10/19/2010 - 17:39 | Link to Comment Oracle of Kypseli
Oracle of Kypseli's picture

Last year I had predicted that Citi will go to GS.

Now it looks that you may be right. GS is most likely the one as it does not have any branches. 

Tue, 10/19/2010 - 17:51 | Link to Comment eatthebanksters
eatthebanksters's picture

It will never happen...the days of TBTF getting bigger, fatter and more systemically dangerous, are over.  Dimon should get his RV and take his daughters on another cross country trip.

Tue, 10/19/2010 - 18:05 | Link to Comment Rasna
Rasna's picture

I'm thinking GS... JPM/Chase/BAC won't be allowed... Really TBTF.

Tue, 10/19/2010 - 18:15 | Link to Comment Quantum Nucleonics
Quantum Nucleonics's picture

Not a chance.  Both are smart enough not to touch the Countrywide corpse.  Not even if it were sanitized.  What would GS want with (a) the little people (i.e. retail banking op) or (b) all the people they turned down for a job, i.e. Merrill.  JPM wouldn't want the anti-trust scrutiny (yes, that's laughter in the background).

More likely, if one of the big banks bit the dust, we'd get a look at all the deep flaws of Dodd-Frank, and Ben & Tim would have a bank to add to their conglomerate of car, mortgage, and insurance companies.

Tue, 10/19/2010 - 16:46 | Link to Comment SignsAndWonders
SignsAndWonders's picture

Sure, I can spell that:

T-A-X-P-A-Y-E-R-P-R-O-B-L-E-M

Tue, 10/19/2010 - 17:05 | Link to Comment Sudden Debt
Sudden Debt's picture

http://upload.wikimedia.org/wikipedia/commons/7/7b/United_States_one_dollar_bill%2C_obverse.jpg

 

Look at the left upper corner: THIS NOTE IS LEGAL TENDER FOR ALL DEBTS, PUBLIC AND PRIVATE

 

For me, that says it all.

Tue, 10/19/2010 - 17:08 | Link to Comment Sudden Debt
Sudden Debt's picture

and if you want the know the answer on how this will play out:

Read the 4 words above the 3 letters "O N E"

http://upload.wikimedia.org/wikipedia/commons/1/1d/United_States_one_dollar_bill%2C_reverse.jpg

 

CAN I HAVE A AMEN BROTHERS AND SISTERS!!

Tue, 10/19/2010 - 21:14 | Link to Comment SpeakerFTD
SpeakerFTD's picture

Clearly counterfeit.  It's "In GS We Trust".

Tue, 10/19/2010 - 17:47 | Link to Comment Bob
Bob's picture

How about F-F-F-F-U-U-G-G-E-E-T-T  DEM    B-B-B-B-B-O-O-O-O-N-N-U-S-S-E-S,

B-I-T-C-H-E-Z!

Tue, 10/19/2010 - 16:50 | Link to Comment Cognitive Dissonance
Cognitive Dissonance's picture

Tyler,

You're taking all the fun out of the final quarter of "managed" earnings and profits for the To Big To Fail banks before the Fraudclosure fecal matter begins to hit the fan. Make sure you wear your Level 5 hazmat suits whenever you write on this subject from here on out. Oh, and make sure your tetanus shots are up to date.

Oh hell, you better wear a full body condom just to be safe. Pictures please. :>) 

Tue, 10/19/2010 - 18:11 | Link to Comment His Dudeness
His Dudeness's picture

CD,

First it's movies with noodle shops...

"Gentlemen. You had a hell of a first day."

Let's Define Something First Before That Something Becomes Obsolete...

When the shit hits the fan

Meaning

Messy and exciting consequences brought about by a previously secret situation becoming public.

Origin

This expression alludes to the unmissable effects of shit being thrown into an electric fan. It appears to have originated in the 1930s. I can't say better than 'appears' as the earliest citation of it that I can find is in the 1967 edition of Eric Partridge's A dictionary of slang and unconventional English:

"Wait till the major hears that! Then the shit'll hit the fan!"

Partridge lists the phrase as Canadian, circa 1930, but as he gives no supporting evidence we have to go by the 1967 date, although it is undoubtedly earlier.

Other, more polite, forms of the phrase, involving eggs, pie, soup and 'stuff', can certainly be dated from the USA the 1940s. For example, Max Chennault's Up Sun, 1945:

"Sounds like the stuff was about to hit the fan."

The Fresno Bee Republican, May 1948, reported on a psychiatrists' convention, under the heading See How Brain Boys Also Run Wild:

"However, once that opening point was settled, the psychiatrists entered wholly in the business of the convention, which culminated, of course, in the selection of officers for the coming year. And that, as the saying goes, was when the soup hit the fan."

The other versions followed soon afterwards.

OBSOLETE REASON: The Dyson Fanless Fan

 

Wed, 10/20/2010 - 01:19 | Link to Comment LowProfile
LowProfile's picture

Can't believe this hasn't been posted here yet...

http://www.youtube.com/watch?v=OIlIL5pPFmY

Tue, 10/19/2010 - 16:50 | Link to Comment lizzy36
lizzy36's picture

Well according to Moynihan BofA's capital markets business "for the second quarter out of the last three ... made money every trading day."

So problem solved.....they will trade their way out of the hole. That always works.

Tue, 10/19/2010 - 17:43 | Link to Comment RichardENixon
RichardENixon's picture

Might work if they short their own stock. Heavily.

Tue, 10/19/2010 - 18:08 | Link to Comment Rasna
Rasna's picture

Just like GS... Use ZIRP free-money, speculate, front-run the market with their HFT algo running full blast... rinse and repeat...

Tue, 10/19/2010 - 16:50 | Link to Comment Spigot
Spigot's picture

Of the $15 Trillion in outstanding mortgages, what percentage does $50 Billion represent? (3/10%)

Of those $15 Trillion what percentage were bundled MBS's and sold but will now be forced back onto the "Banks"? (care to guess?)

If the Banks do not have the money sitting in coffe cans in the back room, what will they have to do to buy back those loans? And what will they do with those loans once they have them?

"Mr. Bernanke, you have a call on line three!"

Tue, 10/19/2010 - 16:51 | Link to Comment Oso
Oso's picture

i almost spit my drink out laughing at how absurd this is visually.

Tue, 10/19/2010 - 16:53 | Link to Comment Astute Investor
Astute Investor's picture

Not to be overly pedantic, but isn't the amount reserved (ending balance) $4.4 billion?  A number still way below the $47 billion claim in any case.

Tue, 10/19/2010 - 17:13 | Link to Comment csmith
csmith's picture

not pedantic at all...correct!

Tue, 10/19/2010 - 17:16 | Link to Comment TemporalFlashback
TemporalFlashback's picture

That's what I am reading, as well.

Tue, 10/19/2010 - 16:53 | Link to Comment Sophist Economicus
Sophist Economicus's picture

Is that a REPO in your hand, or are you just happy to see me?

Tue, 10/19/2010 - 16:53 | Link to Comment Spigot
Spigot's picture

The Federal Reserve system will be the largest owner of unsecured loans on real property on the planet, all the the cost of counterfeiting electronic digital dollars and flooding the coffers of fools and criminals with free money (destroying the savings and fixed incomes of a large swarth of hard working Americans).

This will not sit very well with folks on Main St.

Tue, 10/19/2010 - 17:07 | Link to Comment Horatio Beanblower
Horatio Beanblower's picture

I think that's why the FEMA camps are being built.

Tue, 10/19/2010 - 16:56 | Link to Comment HEHEHE
HEHEHE's picture

What does Dick Bove have to say about BofA?  "I am a long term buyer of BofA".

Tue, 10/19/2010 - 16:57 | Link to Comment tallystick
tallystick's picture

That red bar looks like a hotel on Boardwalk.

Tue, 10/19/2010 - 17:55 | Link to Comment eatthebanksters
eatthebanksters's picture

Or the 'Ho House' on Baltic...

Tue, 10/19/2010 - 16:59 | Link to Comment barliman
barliman's picture

 

Chant it with me now, brothers & sisters!

Lehman, Lehman, Lehman, Lehman, Lehman, Lehman, Lehman, Lehman, Lehman, Lehman, Lehman, Lehman, Lehman, Lehman, Lehman, Lehman, Lehman, Lehman, Lehman, Lehman, Lehman, Lehman, Lehman, Lehman, Lehman, Lehman, Lehman, Lehman, Lehman, Lehman, Lehman, Lehman, Lehman, Lehman, Lehman, Lehman, Lehman, Lehman, Lehman, Lehman, Lehman, Lehman, Lehman, Lehman, Lehman, Lehman, Lehman, Lehman, Lehman ........

Hallelujah!

Barliman     ;->

Tue, 10/19/2010 - 17:09 | Link to Comment Sudden Debt
Sudden Debt's picture

HOLY ENRON! THAT REALLY FELT GOOD! :)

Tue, 10/19/2010 - 16:59 | Link to Comment Sudden Debt
Sudden Debt's picture

Didn't the waranty expire when they put those papers in their pockets and drove of the lot?

Tue, 10/19/2010 - 17:34 | Link to Comment boricuadigm-shift
boricuadigm-shift's picture

Well... They can reference the "Lemon Mortgage Note" protection clause and the warranty terms are not valid.

 

 

Tue, 10/19/2010 - 17:02 | Link to Comment TuesdayBen
Tue, 10/19/2010 - 17:52 | Link to Comment kathy.chamberli...
kathy.chamberlin@gmail.com's picture

who do you think crowned her having the longest legs, herself?

i got damn long legs, like 38 inch inseam.

Tue, 10/19/2010 - 17:58 | Link to Comment eatthebanksters
eatthebanksters's picture

niiccceee!

Tue, 10/19/2010 - 18:08 | Link to Comment Rusty Shorts
Rusty Shorts's picture

Hey baby, what's cooking?

Tue, 10/19/2010 - 19:14 | Link to Comment frankTHE COIN
frankTHE COIN's picture

At the Zero Hedge member get together you will get a lot of conversation.

Tue, 10/19/2010 - 17:18 | Link to Comment SteveNYC
SteveNYC's picture

Pure....fucking......gold!!! Hilarious!!

I think Ping Ping is dead though, so no longer the shortest man in the world.

Tue, 10/19/2010 - 17:05 | Link to Comment frankTHE COIN
frankTHE COIN's picture

Gen Custer could have used his ipad to order more reserves.

Tue, 10/19/2010 - 17:08 | Link to Comment Mitchman
Mitchman's picture

The graphic looks like it was put up by Billy Banzai 7.

Tue, 10/19/2010 - 17:13 | Link to Comment Chemba
Chemba's picture

While it does not change the conclusion, it would help if ZH understood the difference between a flow and a balance or reserve.  the provision in the Q is $872.  The balance in the reserve is $4,400.  So, yes, that is <<< than $47,000.  Also note that $47,000 is the notional value, and losses against that reserve would be substantially less than notional.

 

Tue, 10/19/2010 - 17:23 | Link to Comment Spalding_Smailes
Spalding_Smailes's picture

Yes but this is just the first wave.

Do you know how to sew ?

 

GS would be in the same boat as Lehman without the bailouts ... Goldman derivative book is toast just like the rest .... Securitization is in the history books the ponzi is falling onto itself, Blackrock ect going after the banks I LOVE IT !!!

Tue, 10/19/2010 - 20:38 | Link to Comment Kali
Kali's picture

dsc.discovery.com/videos/air-jaws-?sharks-of-south-africa-shark-feeding-frenzy.html

 

Tue, 10/19/2010 - 17:23 | Link to Comment Fed Supporter
Fed Supporter's picture

"47,000 is the notional value, and losses against that reserve would be substantially less than notional."

 

Is that marked to market? If not what would the real value be? Does anyone have an estimate on the losses?

 

Tue, 10/19/2010 - 19:39 | Link to Comment Astute Investor
Astute Investor's picture

Unfortunately, your comment was 20 minutes late.....

Tue, 10/19/2010 - 17:16 | Link to Comment Howard Bork
Howard Bork's picture

Tyler - quick correction:  The reserve balance is $4,402MM, not $872MM.  The $872MM was the provision during Q3. 

Tue, 10/19/2010 - 17:34 | Link to Comment ReallySparky
ReallySparky's picture

Howard,

Million - Smillion.  And your point is?  They are still toast.  However I do appreciate your attention to detail during this crisis.

Tue, 10/19/2010 - 18:28 | Link to Comment Quantum Nucleonics
Quantum Nucleonics's picture

Just to throw some numbers at the issue, $47 billion in face value, say 70% recovery rate, would be $14.1 billion in losses.  That means they need to come up with anothere $10 billion-ish.  60% recover would be about $15 billion in additional exposure.  And that's just $47B that BAC is disclosing in exposure. 

Tue, 10/19/2010 - 17:35 | Link to Comment deepsouthdoug
deepsouthdoug's picture

Where’s the 'helicopter ben' column?

Tue, 10/19/2010 - 17:40 | Link to Comment economessed
economessed's picture

Red candle?  Did someone page a red candle? 

Mmmmm -- melty burning red candles........

Tue, 10/19/2010 - 17:41 | Link to Comment FortyTwoIsTheAnswer
FortyTwoIsTheAnswer's picture

Perhaps they are under-reserving because they know they will be bailed out?

 

Tue, 10/19/2010 - 17:42 | Link to Comment Real Estate Geek
Real Estate Geek's picture

What is this "fiduciary duty to taxpayers" of which you speak?

Tue, 10/19/2010 - 18:05 | Link to Comment trav7777
trav7777's picture

this is hilarious...where the hell are the fiatsco FRNs going to come from to paper over this gigantic black hole other than the FRBNY?

Tue, 10/19/2010 - 18:15 | Link to Comment Sudden Debt
Sudden Debt's picture

They are planning a brainstorm weekend in Malibu and you'll get a short answer after the weekend.

Tue, 10/19/2010 - 18:14 | Link to Comment goldmiddelfinger
goldmiddelfinger's picture

Wasn't Stan O'Neal brilliant to buy First Franklin Financal for $1.9 BILLION in September 2007? It's now buiried inside BAC like an ecoli viral bomb.

Tue, 10/19/2010 - 18:17 | Link to Comment goldmiddelfinger
goldmiddelfinger's picture

BTW the  "Mortage Lender implode-a-Meter" website is still running strong.  Since 2006! Plentey-o-meat still around since NO ONE has taken a hit yet!

http://ml-implode.com/

Tue, 10/19/2010 - 18:15 | Link to Comment Charley
Charley's picture

+1

Tue, 10/19/2010 - 19:34 | Link to Comment themosmitsos
themosmitsos's picture

loooooooooooooooooooooooooooooooooooooooooooool

on  that chart Tyler! :)))

Tue, 10/19/2010 - 19:44 | Link to Comment boricuadigm-shift
boricuadigm-shift's picture

Isn't the FDIC responsible for these losses?  I mean BAC was force to acquire Countrywide , right?

 

Tue, 10/19/2010 - 20:05 | Link to Comment Cdad
Cdad's picture

No, the fed  held them to the agreement they had previously made...and wanted to back away from.  Some might say semantics...but I think there is a material difference between that and "made/forced" them to buy.

But hey...whatever...

Wed, 10/20/2010 - 03:21 | Link to Comment Bear
Bear's picture

The Gov didn't force them to takeover Countrywide, they just said if they wanted to be in the banking business, they had to help out the Gov by taking over Countrywide

Tue, 10/19/2010 - 20:15 | Link to Comment toros
toros's picture

Everyone has a bad that they tried defend, and it would just get worse and worse... I think the FED is having one of those trades.

Wed, 10/20/2010 - 02:33 | Link to Comment StychoKiller
StychoKiller's picture

Reminds me of what a commentator once said about the Red Sox' losing streak in the World Series:  "Hey, anyone can have a bad Century!"

Tue, 10/19/2010 - 20:37 | Link to Comment subscriptionblocker
subscriptionblocker's picture

Wonder if Bernanke ever reads ZH :)

Wed, 10/20/2010 - 03:18 | Link to Comment Bear
Bear's picture

Everybody reads ZH

Tue, 10/19/2010 - 22:05 | Link to Comment Buck Johnson
Buck Johnson's picture

This is just the beginning and it will be extremely bloody.

Tue, 10/19/2010 - 22:13 | Link to Comment antidisestablis...
antidisestablishmentarianismishness's picture

No ridicule heaped on Doug Kass for buying boatloads of BAC right here due to overblown concerns?

Tue, 10/19/2010 - 22:37 | Link to Comment Destinapp
Destinapp's picture
Their reserves for loan buybacks,  Liability for Representations and Warranties, have only increases $900M since Q3 2003, but their Outstanding Claims by Counterparty have increases $5B  to 12.8B.  If you look at claims approved versus claims rejected, they have been running about 50-50 over the last year.     Net-Net, if they have $10 in claims, they have been paying about $5.  So if they now have $13B in claims, the reserve should be at least $6B and they only have reserved $4.4B.    The $64 question is, What are the total claims going to be once the investors we've been hearing about jump on board, because most of the claims so far have been from the GSE's?
Tue, 10/19/2010 - 23:24 | Link to Comment Occams Aftershave
Occams Aftershave's picture

Most readers are innumerate.   Visual aids make it real.

Sat, 11/13/2010 - 08:31 | Link to Comment mark456
mark456's picture

Thanks for taking the time to discuss this, I feel strongly about it and love learning more on this topic.
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Fri, 01/21/2011 - 11:43 | Link to Comment profoundlogic
profoundlogic's picture

Get rid of the insolvent fab five and sell off the assests to deserving local and regional institutions who will actually lend money.

Do NOT follow this link or you will be banned from the site!