Mr Mortgage

Private Equity to the Rescue of Banks?

They can't come 'riding to the rescue' until there is some transparency to their books with respect to the valuation of their assets. For example, WaMu has $55 billion in Pay Option ARMs, $60 billion in Home Equity Lines and $16 billion in Subprime. Performing, these loans types might fetch 10 cents to 50 cents on the dollar on a great day! Non-performing or as REO, you may get 30 to 50 cents of the new value of the underlying collateral. That would means WaMu is looking at a write down of $10s of millions yet to come. With the housing market continuing to fall and defaults now surging in Alt-A, Jumbo Prime and second mortgages, there is not enough clarity. Most of these banks that hold such large amount of mortgage paper are deep underwater if you were to sell assets to pay off liabilities and 'settle up'. I highly doubt if any private equity will be as foolish as BofA was with CFC or as foolish as TPG was with WaMu for years to come. Just my opinion.

Meredith Whitney Threatens Severe Deflation For Your Portfolio

"a forward-pricing mechanism" - if the markets were a forward pricing mechanism the financials would not have gotten blasted repeatedly over the past year. Markets would not jump on backward looking economic data relentlessly spun by the media to look positive ect. Heck, the market never discounted a recession...look at the snp. With arguably the worst financial system meltdown in the making, the market should be much lower. If the snp was off 30% now from the highs, I may tend to agree with some of what you have said.

Somehow over the years, the markets have lost that forward looking insight and it's all one big fast money day trade. This is likely due to the excessive use of leverage, a long period of low volatility and most Wall St big money traders being too young to remember times other than the good times.

Meredith Whitney Threatens Severe Deflation For Your Portfolio

WM will go to $11 when the nasty rumor mongers come out with yet another BUYOUT RUMOR. Happens every single time the stock is about to go under $10. But, hey it works for you right. How come no SEC investigations when WAMU is being reported as an acquisition target every 30-days.

Lehman Brothers is Looking Sick Again

'Go Long' - good call. Just not on the upgrades. May at $10.

Meredith Whitney Threatens Severe Deflation For Your Portfolio

'Worst Case Losses' outcome = Bear. Period. Everyone knew the trash on their books and refused to do business with them. Remember, what is on the banks books has two outcomes... 1) write downs 2) refusal of customers to do business with them. #2 is likely more detrimental to the banks that #1. Lehman is having that problem right now.

And, sell that WAMU position. I have been in the national mortgage arean based in CA for 20 years. WAMU does indeed have more bad debt that their $340 Billion asset base. What you forget, as do so many, is the majority of WAMU's loans are Pay Option ARMs, which are 100% toxic garbage where 80% make the minimum monthly payment and accrue negative amortization. Neg-am and falling home values in States such as CA, where WAMU is highly concentrated is a fatal combination. The upcoming 'Pay Option ARM Implosion' will make the 'Subprime Implosion' look like a good day. On top of the couple hundred million of these, most of the remaining balance sheet waste is Home Equity Loans (2nd mortgage), which are worth about 5 cents on the dollar right now and finally, the 3rd largest category is subprime.

WAMU or National City will be the first big-named bank to fail. Yes, they will get bailed out, but $2 a share will look generous.

Meredith Whitney Threatens Severe Deflation For Your Portfolio

Whitney is the only one on bubblevision who tells the truth. I have read stories like yous since New Century failed in March 2007, and it has always been 'bashers are the cause, shorts are the cause and it is all contained.'. Well sir, you suck and your kind suck too. All of your relentless pumping and ignoring the facts has hurt the bulls much more than the bears because ultimately fundamentals come out and the levered up financials crash...they always do. They will keep doing it for quite some time. Lehman, Merrill, Goldman all products of leverage and cannot survive without it...just like Bear. The banks continue to lie.

Didn't you hear Paulsen last week??? I will summarize. 'Because you keep submitting very crappy collateral to our new facility, we want to look under your kimono like we do all other banks who borrow Fed money. We do not trust you. Also, to all banks, please cut your dividend and raise cash now. You will need it and not be able to 3 months from now.'

The gig is up pumpers...you lied for years and now you are paying the price.

By the way, the worst pumper of all, CNBC, put Whitney on after hours so as not to crash the markets while they were open. They only allow pumpers on during the day. On days that look really bad or at the end of a quarter, they put Cramer on all day to try to effect the markets. He just sits there and speculates and lies trying to orchestrate a short squeeze. If it were not for short squeezes, he probably would never find a stock that rises, because until someone whispered in his ear in Aug, he swore up and down all this was contained and Downey Savings was worth $100, Countrywide $45, IndyMac $40 and WAMu $45.

You need to quit following the pumper crowd and get the bell around your neck off. You may make some money. Reality is here. You lost.

Lehman Brothers is Looking Sick Again

LEHMAN IS UNDER PRESSURE BECAUSE THEIR EARNINGS RELEASE/STATEMENT WERE FRAUDULENT AND LUCKILY DUE TO THE POWER OF THE INTERNET, EVERYONE KNEW ABOUT IT INSTANTLY. LEHMAN DESERVES EVERYTHING THEY GET FOR DECEIVING THE INVESTING PUBLIC.

BELOW ARE THE FACTS ABOUT LEHMAN'S EARNINGS. THESE ARE NOT RUMORS, BUT FACTS.

www.portfolio.com/news...

What Are Brokers' Exposures to Carlyle Capital?

Hi Barry,

The operative phrase is ..."Based on available information,". Just wait until the Pay Options, ALT-A, Prime and Home Equity loans start popping. They already are starting here in CA. As a matter of fact, in CA 66% of all new foreclosure activity are Notices of Default, which are the 90-day lates (preforeclosure). This means a wave is coming and the lip is just here.

Also, the impact from the 'negative equity effect' is just starting to be realized.

By the sounds of this report, they are still holding to their guns that this is still a 'subprime thing'. They should know better.