Pots Call Kettles Black, Again
American International Group, the world's largest insurer,
fell 11% to the lowest since 1995 after Wachovia downgraded the company,
saying it may post as much as $7 billion in losses on credit-default swaps in the second quarter.
The insurer may have another "sizable" writedown after about $20 billion in losses on the contracts over two quarters. AIG stock is down 66% YTD.
Meanwhile, Oppenheimer's Meredith Whitney, said the earnings outlook for Wachovia...
has "dramatically diminished" and bank stocks will keep falling until asset prices "get real." Wachovia stock down 74% YTD.
Wachovia fell as much as 13% in trading after Whitney said prospects for shareholders of the bank are "bleak" and
"mortgage assets are still priced too high on U.S. banks' balance sheets."
The Nattering One muses... as we have maintained all along, asset prices are unjustified, unrealistic and unsupportable.
This trainwreck will not stop until the underlying asset price, real estate, "gets real".
fell 11% to the lowest since 1995 after Wachovia downgraded the company,
saying it may post as much as $7 billion in losses on credit-default swaps in the second quarter.
The insurer may have another "sizable" writedown after about $20 billion in losses on the contracts over two quarters. AIG stock is down 66% YTD.
Meanwhile, Oppenheimer's Meredith Whitney, said the earnings outlook for Wachovia...
has "dramatically diminished" and bank stocks will keep falling until asset prices "get real." Wachovia stock down 74% YTD.
Wachovia fell as much as 13% in trading after Whitney said prospects for shareholders of the bank are "bleak" and
"mortgage assets are still priced too high on U.S. banks' balance sheets."
The Nattering One muses... as we have maintained all along, asset prices are unjustified, unrealistic and unsupportable.
This trainwreck will not stop until the underlying asset price, real estate, "gets real".
Comments
Wachovia is one of the banks in trouble.
Could Wachovia collapse? Yes.
Riskier banks will be offering higher risk premiums.
Caveat Emptor