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Wachovia Still Does Not Understand Pay Option ARM Risk

Their Pick-a-Pay portfolio is ridiculous. From 120b, the company expects 9-10% to be worthless. With home prices expected to further decline, that number will be higher and they will have a tough time. They have to raise more capital or will be bought by other big bank at discount.

Moody's Brings In the Lawyers

If these European CPDOs were incorrectly rated AAA by moodys, then S&P and Fitch should have a different rating which did not happen....my guess this whole computer thing is to delay legal proceeding for improper ratings...