MorganStanley-Wachovia

[SHELLY]

Just what kind of shape is Wachovia in?

For starters, they paid $26 Billion for Golden West S&L in 2006--king of the "Option ARM" or "Pick-A-Pay" mortgages at the time. Golden West brought along its $122 Billion in Pick-A-Pay loans and slapped them on Wachovia's books . Wachovia then put its mortgage lending program into the hands of Golden West who continued to push the "pick-a-pay" loans so 81-year-old grannies and Car Wash Attendants could acquire $450,000 McMansions for 1% interest only if they chose.

Due to a loophole in FASB accounting rules, Wachovia would book income from the loan at the fully amortized rate, even though granny only paid 1%. Meanwhile, granny's home value is plummeting while she's slapping the unpaid interest/principle on the other end of the loan.

This is just a taste of the problems with Wachovia.

Here's the rest of the story: http://seekingalpha.com/article/94349-is-wachovia-the-worst-run-bank-in-america

.

 

[JoshMclean]

Shelly,
Do you think they will end up taking a look at who is doing all of the shorting? I know that conspiracy theories abound about who may be doing it.

 

[FLSunChaser]

For starters, they paid $26 Billion for Golden West S&L in 2006--king of the "Option ARM" or "Pick-A-Pay" mortgages at the time. Golden West brought along its $122 Billion in Pick-A-Pay loans and slapped them on Wachovia's books . Wachovia then put its mortgage lending program into the hands of Golden West who continued to push the "pick-a-pay" loans so 81-year-old grannies and Car Wash Attendants could acquire $450,000 McMansions for 1% interest only if they chose.

Due to a loophole in FASB accounting rules, Wachovia would book income from the loan at the fully amortized rate, even though granny only paid 1%. Meanwhile, granny's home value is plummeting while she's slapping the unpaid interest/principle on the other end of the loan.

This is just a taste of the problems with Wachovia.

Here's the rest of the story: http://seekingalpha.com/article/94349-is-wachovia-the-worst-run-bank-in-america

.

We should start an "Ask Shelley" forum. For so long he/she caught heat for the negative postings back during the boom (or right after). And now, we're all hanging on to every word he/she says. People could post their questions and concerns and Shelley can give us her/opinions.

 

[northshore]

Shelly,
May I ask what you do for a living?

 

[SHELLY]

Shelly,
Do you think they will end up taking a look at who is doing all of the shorting? I know that conspiracy theories abound about who may be doing it.

They're already on that case:

New York AG launches probe of short-selling
By STEVENSON JACOBS

NEW YORK (AP) — New York state is launching an investigation into whether some traders used illegal tactics to drive down the stock price of several Wall Street firms.

Attorney General Andrew Cuomo told reporters Thursday his office has received a "significant number" of complaints about short sellers, or investors who hope to profit by placing bets that a financial company's stock will fall.

Short-selling is not illegal. But Cuomo said he will focus on whether short sellers engaged in conspiracy or spread bad information to influence the stock prices of Lehman Brothers Holdings Inc., American International Group Inc., and other firms that have been hammered in the ongoing financial crisis.

"I want the short sellers to know today that I am watching. If it's proper and legal, they have nothing to worry about," Cuomo said. "If there's a conspiracy to spread false information to destabilize these institutions, that may very well be illegal."

Short-selling has been blamed for steep drops in the stock price of several companies, most recently Goldman Sachs Group Inc. and Morgan Stanley.

 

[SHELLY]

We should start an "Ask Shelley" forum. For so long he/she caught heat for the negative postings back during the boom (or right after). And now, we're all hanging on to every word he/she says.

That's not wise on so many levels.

People could post their questions and concerns and Shelley can give us her/opinions.

Please don't...sounds too much like work.

.

 

[SHELLY]

Shelly,
May I ask what you do for a living?

Sure...you can ask.

.

 

[goofer]

They're already on that case:

New York AG launches probe of short-selling
By STEVENSON JACOBS

NEW YORK (AP) ? New York state is launching an investigation into whether some traders used illegal tactics to drive down the stock price of several Wall Street firms.

Attorney General Andrew Cuomo told reporters Thursday his office has received a "significant number" of complaints about short sellers, or investors who hope to profit by placing bets that a financial company's stock will fall.

Short-selling is not illegal. But Cuomo said he will focus on whether short sellers engaged in conspiracy or spread bad information to influence the stock prices of Lehman Brothers Holdings Inc., American International Group Inc., and other firms that have been hammered in the ongoing financial crisis.

"I want the short sellers to know today that I am watching. If it's proper and legal, they have nothing to worry about," Cuomo said. "If there's a conspiracy to spread false information to destabilize these institutions, that may very well be illegal."

Short-selling has been blamed for steep drops in the stock price of several companies, most recently Goldman Sachs Group Inc. and Morgan Stanley.

This will be a huge waste of taxpayer money. Almost impossible to prove a conspiracy. All traders, whether on the buy-side or sell-side, talk to each other and exchange ideas and what they are hearing on the street. That is not a conspiracy. On the other hand if someone is stupid enough to blatantly make up sheet and it is in an email or a taped conversation, there could be grounds for a lawsuit. But this is incredibly difficult to prove just as insider trading is very difficult to prove.

 

[Miss Kitty]

...SHELLY, thanks for keeping it real.

What's up with MS today?

 

[rheffron]

Keep voting Republican!