Comments on: Wells sells $600 million in distressed assets at 35 cents on dollar http://www.creditwritedowns.com/2009/07/wells-sells-600-million-in-distressed-assets-at-35-cents-on-dollar.html Finance, Economics and Markets Fri, 10 Feb 2012 00:37:00 +0000 hourly 1 By: Edward Harrison http://www.creditwritedowns.com/2009/07/wells-sells-600-million-in-distressed-assets-at-35-cents-on-dollar.html#comment-56745 Edward Harrison Wed, 15 Jul 2009 16:52:00 +0000 http://www.creditwritedowns.com/2009/07/wells-sells-600-million-in-distressed-assets-at-35-cents-on-dollar.html#comment-56745 Tom, that is a distinct possibility which is why I wondered if they were 'brokering' a transaction. another question is where are these marks on WFC's books. I got a good tip from a commenter over at Naked Capitalism who makes a good case for these loans being Wachovia-originated paper that has already been severely marked down. Apparently Wachovia had a lot of business with NovaStar. So, it would make sense that this could be Wachovia paper now being marked up. I would also note that WFC was one of the few banks that made M2M adjustments in Q1 due to the revised FAS 157 guidance so the notes in their 10-Q might give some clues as to how their marks are changing and the effect on Q2 earnings. Tom, that is a distinct possibility which is why I wondered if they were ‘brokering’ a transaction.

another question is where are these marks on WFC’s books. I got a good tip from a commenter over at Naked Capitalism who makes a good case for these loans being Wachovia-originated paper that has already been severely marked down.

Apparently Wachovia had a lot of business with NovaStar. So, it would make sense that this could be Wachovia paper now being marked up.

I would also note that WFC was one of the few banks that made M2M adjustments in Q1 due to the revised FAS 157 guidance so the notes in their 10-Q might give some clues as to how their marks are changing and the effect on Q2 earnings.

]]> By: Anonymous http://www.creditwritedowns.com/2009/07/wells-sells-600-million-in-distressed-assets-at-35-cents-on-dollar.html#comment-56744 Anonymous Wed, 15 Jul 2009 15:50:00 +0000 http://www.creditwritedowns.com/2009/07/wells-sells-600-million-in-distressed-assets-at-35-cents-on-dollar.html#comment-56744 Fascinating article, Ed. I think the key question is whether Wells owned these loans or was acting as an agent. I would tend to think they probably were acting as an agent for someone else as I can't figure out a rational path from Accredited and Nova Star to Wells. Here, however, is one off the wall idea. Was Wells providing warehouse loans to the two? If so, as the two companies melted down did Wells end up with these loans because they were collateral that was backing their warehouse loans? Fascinating article, Ed. I think the key question is whether Wells owned these loans or was acting as an agent. I would tend to think they probably were acting as an agent for someone else as I can’t figure out a rational path from Accredited and Nova Star to Wells.

Here, however, is one off the wall idea. Was Wells providing warehouse loans to the two? If so, as the two companies melted down did Wells end up with these loans because they were collateral that was backing their warehouse loans?

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