К основному контенту

Citigroup has come up with possible $5 billion in writedowns...

Citigroup has come up with possible $5 billion in writedowns on E*Trade which would more that wipe out E*Trades equity. With that in mind let's look at E*Trade's 10-Q filed on November 9 and see if we can come up with enough problem areas to reach $5 billion. Credit Ratings On Asset Backed Securitiesclick on chart for crisper displayEasily $1.26 billion in asset backed securities is of dubious value. There is also a noticeable distinction right now between AAA and AA. No breakdown is available on that grouping. $1.77 Billion in asset backed securities is rated AA or higher. E*Trade Loan Receivablesclick on chart for crisper displayLoan to Value and FICO analysisclick on chart for crisper displayFICO Scores from myFICOThe above APRs are for 30 year fixed as of 2007-11-12 and are provided to give a practical idea of differences between FICO scores as to credit quality. Portfolio Vintageclick on chart for crisper displayE*Trade ramped up loans at the worst possible time, right as housing peaked and for another year after. Thus I question the loan to value numbers listed earlier. A 5-10% devaluation of those assets (losses would be far bigger in a forced sale), is certainly within the realm of likely. Miscellaneous 10-Q Facts and Figures

Комментарии

Отправить комментарий

Популярные сообщения из этого блога

BEA 4th Quarter GDP 1st Estimate 0.7% Q&A: Why Did GDPNow...

BEA 4th Quarter GDP 1st Estimate 0.7% Q&A: Why Did GDPNow Rise After Durable Goods? When are Construction Revisions Coming? Moody's Investors Service on Thursday placed Ambac Financial Inc (ABK), which insures more than $500 billion in bonds, on review for a possible ratings cut, an event that could trigger similar downgrades on billions of dollars of debt. A cut could mean the ratings on the bonds it insured -- which amount to $556 billion in value -- would also be lowered, forcing the owners of those bonds to mark down the value of their portfolios. Moody's announcement came after Ambac, hard hit by the turmoil in credit markets, said it was recording a $3.5 billion write-down, equivalent to nearly two-thirds of its net worth, and plans to raise $1 billion in new capital to maintain its ratings. MBIA Inc (MBI), the world's biggest bond insurer, sold $1 billion of surplus notes last week to shore up capital and preserve its crucial triple-A rating. 'The markets are...
Отправить комментарий
Далее...

This post will address the relevance of the Fed after...

This post will address the relevance of the Fed after a further continuation of the 'Saga of Sonnypage', an Atlanta area real estate broker. Sonnypage has this update to share, followed by my thoughts on the Fed, the economy, and housing. Sonnypage was highlighted in Lights Out in Georgia on 2006-07-27 and Soft Market Debris on 2006-08-02. As you can see from the date of Sonnpage's post, this is slightly out of sequence. Here goes from Sonnypage:Sonypage - 2006-07-30Most of the regulars here know that my wife and I are Realtors, a husband and wife team, who practice just north of Atlanta. Our business is still mostly in the towns of Roswell and Alpharetta, but now also increasingly further north, up into Cherokee and Forsyth counties, and up to Hall County on Lake Lanier. Our price range is all over the board, from a low within the last year of $125,000 and a high of $1,250,000. We are strictly residential, no commercial. We have incorporated ourselves, but are still indepe...
Отправить комментарий
Далее...

BEA 4th Quarter GDP 1st Estimate 0.7% Q&A: Why Did GDPNow Rise...

BEA 4th Quarter GDP 1st Estimate 0.7% Q&A: Why Did GDPNow Rise After Durable Goods? When are Construction Revisions Coming? Ambac Financial Group Inc., struggling to avoid the crippling loss of its AAA credit rating, took out insurance on $29 billion in securities it guarantees. The world's second-biggest bond insurer agreed to transfer the risk that the securities will default to Assured Guaranty Ltd., according to a statement today. Reinsuring the debt will free up capital backing those bonds, Ambac said. Ambac guarantees $556 billion of securities and the loss of its AAA rating jeopardizes the rankings on that debt as well as threatens the New York-based company's biggest source of revenue. 'Reinsurance is a valuable, capital-efficient and shareholder-friendly tool for managing risk and capital,' Ambac Chief Executive Officer, Robert Genader said in the statement. My Comment: Reinsurance on $29 billion out of $556 billion is unlikely to do anything but waste mone...
Отправить комментарий
Далее...