We’re in earnings season and the race is on for the largest writedown in the US. Merrill is reputed to be looking at $15bn and not to be outdone, Citi is rumoured to be looking at $24b
What I don’t understand is how Merrill was up 5% on Friday despite the rumours of it’s numbers. I think Citi was up aswell!
$15bn isn’t an awful lot considering the amount crap bobbling about. Countrywide alone have €15tr on their books, 7% of which isn’t paid within 60 days.
That’s $105 billion dollars of mortgages in default. Ouch
BoA bought Countrywide for $4 billion.
It’s only numbers at the end of the day. When the inevitable does occur (US economy implodes), huge numbers of assets will be seized in the ensuing chaos. The cycle will then be built up again – step and repeat – until eventually, there is no middle class, the corporations are more powerful than the government and a small ruling class prevails. That’s the way I see things panning out.
Your figures are a bit off. Countrywide services a portfolio totaling $1.5 trillion (meaning it collects and processes payments on the mortgages but doesn’t hold the risk). It’s own loan portfolio is about $400 billion.
This is true…