David Chang_

Next Victim, Please!

Wachovia is the next to fall. It has $120 billion in option ARMs. JPM marked these loans down 17%. This would result in a $20 billion writedown. WB has another $130 billion in residential real estate assets (Alt-A, home equity and subprime).

If WB were to mark assets down to the JPM/Wamu levels, WB would have to writedown an astounding $30 billion. Could WB raise $10-15 billion without severely diluting shareholders?

Citi Got a Good Deal on the Online Bank 'Egg'

The only problem with the analysis is that the acquisition is not accretive. In fact the failure to mention that Egg has not made a profit from the operations makes this acquisition quite different from the others quoted.