It’s getting to be a joke. Week after week, month after month, Wachovia (WB) has been extending waivers on broken covenants by NovaStar (NFI). The latest extension, until January 4, follows an extension last week.
Makes you wonder if either Wachovia's possible financial hit from NovaStar is bigger than generally expected and/or somebody has pictures on someone and/or Wachovia is merely pushing this off so it will be next year’s problem. (After all, if Wachovia doesn’t grant the waiver, it gets a bunch of worthless assets.)
Another possible interpretation: More mortgage-related writeoffs at Wachovia would appear to be in the offing.
The beat goes on…