FHLB, Fed, Countrywide, BofA, Angie & Some Phonecalls
Cheif would you believe, by that much...
On Nov 27th, we Nattered about 37% of the FHLB Atlanta branches loans belonging to Countrywide.
After never lending more than $150 billion in any given year, the FHLB sold $210 billion of debt in November alone,
and by year end the FHLB had pumped over $750 billion into the system.
The three largest borrowers: Citigroup, Countrywide and WaMu.
Citigroup will soon reveal cumulative 2007 writedowns of over $22 billion...
and as of September, Countrywide owed the FHLB over $50 billion...
WaMu we don't want to talk about right now, not just yet, cuz its really juicy. In our best Sopranos style...
certain sources who shall remain unknown, say that certain individuals received certain phone calls over the last 2 days...
from certain other individuals who cannot be named. However, the jist of the phone calls can be revealed...
B of A - told in no uncertain terms to step up and buy Countrywide and not worry about the $50 billion Countrywide owes the FHLB.
FHLB - Atlanta branch told not to worry about BK. Fed & Treasury will manage situation for restitution of $50 billion owed by Countrywide.
Angie Mozilo CEO of Countrywide - your company is not going BK, oh and its not your company anymore, so sit down, shut the fuck up and do as your told or else.
Bottom line: A Countrywide BK meant the FHLB defaults on their debt, and the monolines insuring their debt go BK...
leading to a panic in the already stressed debt market, a run on the banking system and a potential stock market crash of epic proportion.
The 12 FHLBs have investment portfolios with $130 billion in mortgage backed securities.
Ronald Rosenfeld, chairman of the Housing Finance Board:
"We believe after very extensive analysis that there is very minimal credit risk in the MBS held by the banks,"
Asked what would happen to the FHLB portfolios if house prices fell by 20 or 30 per cent, he replied:
"I do not know the answer, but I can tell you I do not want to hear the news."
The Nattering One whipsers: Get ready Ronnie, its comin.
On Nov 27th, we Nattered about 37% of the FHLB Atlanta branches loans belonging to Countrywide.
After never lending more than $150 billion in any given year, the FHLB sold $210 billion of debt in November alone,
and by year end the FHLB had pumped over $750 billion into the system.
The three largest borrowers: Citigroup, Countrywide and WaMu.
Citigroup will soon reveal cumulative 2007 writedowns of over $22 billion...
and as of September, Countrywide owed the FHLB over $50 billion...
WaMu we don't want to talk about right now, not just yet, cuz its really juicy. In our best Sopranos style...
certain sources who shall remain unknown, say that certain individuals received certain phone calls over the last 2 days...
from certain other individuals who cannot be named. However, the jist of the phone calls can be revealed...
B of A - told in no uncertain terms to step up and buy Countrywide and not worry about the $50 billion Countrywide owes the FHLB.
FHLB - Atlanta branch told not to worry about BK. Fed & Treasury will manage situation for restitution of $50 billion owed by Countrywide.
Angie Mozilo CEO of Countrywide - your company is not going BK, oh and its not your company anymore, so sit down, shut the fuck up and do as your told or else.
Bottom line: A Countrywide BK meant the FHLB defaults on their debt, and the monolines insuring their debt go BK...
leading to a panic in the already stressed debt market, a run on the banking system and a potential stock market crash of epic proportion.
The 12 FHLBs have investment portfolios with $130 billion in mortgage backed securities.
Ronald Rosenfeld, chairman of the Housing Finance Board:
"We believe after very extensive analysis that there is very minimal credit risk in the MBS held by the banks,"
Asked what would happen to the FHLB portfolios if house prices fell by 20 or 30 per cent, he replied:
"I do not know the answer, but I can tell you I do not want to hear the news."
The Nattering One whipsers: Get ready Ronnie, its comin.
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