Nightmare on Wall Street

[spaceboy761]

The patient shows signs of life!

http://biz.yahoo.com/ap/080915/aig.html

[Niccivan]

Does it effect any loans we have with those companies like Citibank?

[voodoo1215]

sooo....how will it affect our mortgages with wamu?

[spaceboy761]

Citibank is not immune here. The general sentiment around here is that once AIG survives (or doesn't), Citigroup is next on the chopping block. They were in trouble a little while ago and hired a new CEO that everyone was pretty excited about, myself included. He has disappointed greatly and done next to nothing with the company and its credit problems. It's possible that Citi may be forced to sell off some business units, including the one that may manage your loan. Nothing is definite right now.

[Niccivan]

Well, I have 1 car loan and a HUGE school loan through Citi.

I guess we'll wait and see what happens.

[spaceboy761]

Originally Posted by voodoo1215

sooo....how will it affect our mortgages with wamu?

Negatively, I assume!


The word here is that WaMu is going to get bought out by either BOA or Morgan Stanley. BOA would be a best case scenario for people currently holding mortgages with WaMu.

A Morgan Stanley acquisition may not be as friendly. It's not like they're going to gestapo you out of your house overnight, but they will be a lot tougher to work with if you have to tweak the mortgage in any way (refinancing, advances, et al). Morgan Stanley isn't really equipped to take on major commerical bank ops like that.

[spaceboy761]

Originally Posted by Niccivan

Well, I have 1 car loan and a HUGE school loan through Citi.

I guess we'll wait and see what happens.

Crazy crap can happen, but the commercial bank stuff should be OK.

[spaceboy761]

At least the Treasuries are rallying really hard today. That's a very good sign.

[voodoo1215]

soo... any ideas on how to benefit from this? with out a huge amount of cash??

[spaceboy761]

I really can't advise anything that wouldn't be outright gambling. The one play I liked (long 2Y-5Y treasuries) traded up this morning, so that's gone. Trading major fundamental changes like this is very dangerous and best left to the professionals. And even the professionals are going to fuck it up more than half the time in an environment like this. The best advice I can give is to resist the temptation of a high-volume market and stay away.