SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?


To: Wallace Rivers who wrote (30229)4/15/2008 1:34:51 AM
From: Spekulatius  Respond to of 70582
 
Wb - interesting numbers.

Subprime exposure now only 1.7B$, whittled down through writeoffs from 3.8B$.

There is also still about 11B$ in commercial mortgage and leveraged finance exposure. they have only written down 5% of the total - this does not sound like enough many leveraged buyouts have been trading at 90c on the $, so roughly 500M$ more in writeoffs to get them down to market value.

Now the big problem are the 60B$ in home equity and 120B$ in pick a payment mortgages plus 60B$ in traditional mortgage. i'd guess when it's all said and done, WB will write off 10% of pick a payment and 3% of home equity loans and mortgage loans. that would amount to 15.5B$ in additional writeoffs - minus 50% of existing reserves (50% of 6.5B$ -3.25B$ which also cover credit cards and other loans) , so i think they show about 12-13B$ in additional losses down the road.

WB shows that we are basically going from a subprime (and Alt-A ) crisis to a "prime" loan crisis. Not a lot of fun to be a banker these days. of course i have no idea of these numbers are correct, they might be off by a 100% and I have no clue in which direction, but i sort of trust my back on the envelope calculations more so than the banker and analyst double speak.