On Sep 18, 2008, at 2:40 PM, Jim Devine wrote:
(1) they start creating problems for the financial system, as AIG did even though it wasn't a "bank"; and
Doesn't AIG "insure" a bank's "line of credit" rather than the assets themselves?
I think the reason WAMU is in trouble is because it has more than 15,000 homes on its assets list...homes they had to recall when the loans didn't work, homes they don't want and that don't add to their capitalization. Their line of credit is shot. It's not that WAMU doesn't have money. They do; but it belongs to their depositors. AIG got in trouble because it backed the function (which is fraudulent to begin with, I believe).
I'm parroting here what I was told by a friend in the banking industry who works for a bank that narrowly (and happily) escaped being bought out by AIG a few years ago. I'm interested in knowing if this analysis bears water or not.
My friend attended the annual convention of mortgage lenders in Las Vegas this week. He said the convention normally is crowded but that one could shoot a cannonball across the main hall at this one and not hit anyone. Dismal, says he.
Dan _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
