Lockstep Investing

Rating the Top 12 U.S. Banks - From Hidden Gems to Zombies

Martin, on Wells Fargo you miss the California exposure and the Wachovia (Golden West) exposure. That alone pushes that bank into walking wounded status.

On JPM you fail to mention that they are the biggest CDS broker in the market. Counterparty risk anyone? They are a zombie in their own right. They know if a crisis happens the only thing that can save them is government intervention. That is why the Fed gave them Bear Sterns to begin with, it is better to have all the counterparty risk in one spot so it is identifiable and manageable, rather than spread across market players.

Overall, good summary.

Countrywide: Dogs Howling Over Bare Bones

Great post Mish. We need an update as soon as you get time. I wish I was an accredited investor for your hedge fund. But I like to see how the players play the game. :)

Can you also address the exposure B of A takes from boomerang loans from Freddie and Fannie back to Countrywide? At the end of the 2Q Freddie and Fannie said their #1 risk mitigation effort was to do forensic analysis on deteriorated loans and send them and the loss back to the originator. Countryslide originated 1/4 of the loans from 2007 back... It sounds like B of A will be cleaning that up for years. Any thoughts?