Friday, November 6, 2009

Fannie Mae’s results – oh, and what if Bank of America reported the same way…

There have been some mathematical corrections to this post discussed in the comments. My pencil notes had the numbers right. By the time I got to writing it out errors had entered. Sorry.

Fannie Mae just put out awful looking results based primarily on massive (and increasing) credit loss provisions. Indeed their provisions this quarter were the largest thus far in the cycle.

Its worth looking a little closer because – like it or not – all Americans are owners of Fannie – both the downside (their current book) and the upside (if any) through taxpayer ownership of the common stock.

The nature of credit loss provisions

Each quarter almost every financial institution takes some charges when loans they have made settle at less than 100c in the dollar. At the moment charge-offs are at historic highs.

Every quarter a company makes an estimate of future losses – a “provision” if you will.

Provisions by definition are estimates – whereas charge-offs are real and mostly final.

The difference between provisions and charge-offs goes to a “reserve for future losses” or more commonly just “reserves”.

Most financial institutions are taking more provisions than charge-offs – in other words they are building reserves. This is necessary because there are a lot of delinquencies and a lot of loans in the foreclosure process and – just frankly – a lot of loans that common sense tells you will end in charge-off.

Most institutions build reserves relatively slowly. Bank of America for instance – in broad numbers – has had 13 billion of provisions per quarter for the last three quarters and charge-offs of 6,8 and 9 billion respectively. If the charge-offs skyrocket (say to 20 billion) at bank of America then it will find itself under-reserved – and will wind up having to report very big losses. However if charge-offs slowly level off around 13 billion per quarter then BofA will – ex-post – look OK.

The honest answer in the case of BofA is that we really do not know where charge-offs will wind up but we can make educated guesses. In the last conference call BofA thought charge-offs would peak about the first quarter of 2010. If they are right then their current reserving is right and BofA is probably a steal as a stock right now. If however charge-offs continue to rise for another 18 months peaking out at say $35 billion per quarter then BofA will need to be recapitalised further and may wind up as government property.

I am inclined to think that BofA’s current educated guess (charge-offs peaking early next year) is a little optimistic – but not very optimistic and I am happily long Bank of America common shares. This is – as I stated – an educated guess. Other people I respect have different educated guesses. The (very smart) Chris Whalen has a completely different view arguing (amongst other things) that the liabilities for fraudulently sold securitisations at Countrywide and Merrill will produce losses large enough to render BofA insolvent. I think he is spectacularly wrong – but difference of opinion makes a market.

In BofA’s case 13 billion per quarter is sort of a magic number because it happens to approximate the pre-tax, pre-provision profitability of the bank. Provided actual end charge-offs remain around or below 13 billion per quarter BofA will be able to earn its way of its mess. If charge-offs go to 25 billion per quarter they can’t earn their way out – and hence just the implicit government guarantee they currently have will not be enough to save them.

I note that current charge-offs are comfortably within the 13 billion per quarter so all is well for the moment. As to the future – all we can take are educated guesses. And that is all bank provisioning is. In BofA’s case the 13 billion (plus or minus a couple) of provisions taken each quarter seems a little optimistic to me – and you can understand why when the gun is pointed at the executives head they manage to (miraculously) pick their provisions to roughly match their pre-tax, pre-provision profit. But as I have noted I think the provisions in BofA’s case are only slightly optimistic – and the end charge-offs won’t go very far above 13 billion per quarter.

Analysing the Fannie Mae result in this light

Fannie Mae – as stated - took an enormous loss this quarter. The key to this loss was a credit charge of $22 billion. This credit charge can be broken into two broad categories – which are (a) the actual charge-offs taken, (b) the addition to reserves.

Like BofA, Fannie (and Freddie and just about everyone esle) needs large reserves because – frankly losses and delinquency are still getting worse. The amount you need to add to reserves is an estimate. If your reserves are large enough (which doesn’t seem to be the case in any financial institution I look at outside the GSEs) then you don’t need to add and you might even be able to run the reserves down a little.

In Fannie’s case this quarter there is one more thing complicating the reserves versus charge-offs picture. Fannie changed the way it accounts for one of its loan modification programs (the “Home Affordable Modification Program” or the HAMP) such that when loans are acquired from securitisation trusts for modification they are written down to market. This loss (which Fannie calls a “loss on acquisition”) is not a final loss (as per a normal charge-off) but rather an estimate of the future charge-offs they would take on those loans.

So lets break up the credit charge.

The provision for credit charges was 21.96 billion – which I will round to 22.0 billion – given that the nearest 100 million seems close enough. The charge offs were 10.9 billion (see table 10 in the 10Q). Note 3 to that table tells us that of that 10.9 billion 7.7 billion came from the “loss on acquisition” on the HAMP. The actual loans that were charged-off (final) were 3.2 billion. They were probably a bit higher because there were some HAMP charges taken last quarter and maybe some were finalised this quarter.

But nonetheless the way to think about this is that final losses this quarter were 2.2 billion. Provision for future losses (HAMP losses and provision build) were 19.8 billion. Similar ratios have applied every quarter since Fannie Mae went into conservatorship.

Now I am going to make the obvious point. Bank of America provides roughly 1.5 to 2 times its charge-offs each quarter. Fannie Mae provides 7 times (and has been closer to 10 times in past quarters).

If Bank of America were to provide at the same rate its quarterly losses would be 50-80 billion and it would be completely bereft of capital – it would be totally cactus. It would be – like Fannie Mae – a zombie government property.

What I think is going on…

I think what is going on here is a different standard for Bank of America. And for Wells Fargo. And for Citigroup. And for PNC and for every other major bank in America. There is also a different standard for Goldman Sachs. That standard is different to Fannie Mae. BofA (like everyone else) gets to choose its reserving ratios – and to be a little optimistic. Fannie Mae chooses ratios that are so-off-the-scale high that it is different.

Remember provision build is an estimate not a fact – and Fannie is estimating extraordinarily bearishly and Bank of America’s estimates are slightly generous. But regulators are controlling Fannie in such a way that keeps it down. They are allowing Bank of America to act as if all is well whilst Fannie Mae appears to be a complete zombie. Which I think corresponds roughly to the new policymaker consensus that what is good for big banks is good for America.

It is clear why BofA has chosen the 13 billion of provisions per quarter – which is that it roughly corresponds to their pre-tax pre-provision income. Moreover – in my view the 13 billion per quarter is not far wrong so the decision is defensible.

It is not clear why Fannie has chosen to reserve quite so aggressively. My guess is that there is no active conspiracy – but the pressure to make extraordinary provisions at Fannie is very high for a variety of non-commercial reasons. These provisions are defensible only if you believe the housing market gets substantially worse from here. That seems to belie the evidence on the ground – at least for now. Housing markets in the core bubble states have clearly stopped deteriorating. Current provisions (including mark to market provisions on the HAMP) are now 6 years current charge-offs. They are only 18 months or so at most banks including BofA.

Am I being too harsh?

Is it too harsh to apply the same provision to charge-off ratio to Bank of America as it is to apply it to Fannie Mae? Well if the credit was deteriorating faster at Fannie that BofA I would be too harsh. But if the credit were deteriorating faster at BofA then I would be too generous. The best test of that is non-performing loans.

At year end BofA non-performing loans were 18.2 billion. They were 31.9 billion by the end of the third quarter – a rise of 75 percent.

Fannie Mae NPLs were 111.8 billion at the end of the year (20.4 on balance sheet, 98.4 off balance sheet). They were 197.4 billion at the end of the third quarter – a rise of 76 percent.

75 percent versus 76 percent – I will call that a wash.

Indeed almost however I cut it the situation is getting worse for BofA at roughly the same rate as it is for Fannie Mae.

Except for one thing. The government wants BofA alive. Lots of people want Fannie Mae dead.

My views

Bank of America survives now but for the good grace of the quasi-government guarantee. So do all banks. But Bank of America is – in my view (a view open for dispute) ultimately solvent. Its provisions are optimistic – but not (in my view) excessively so. If the cash losses per quarter rise to (say) 30 billion dollars then BofA will die and will cost the taxpayers a lot of money. I think that is unlikely but it is not impossible. Provision additions are always just an educated guess – not a science.

If the same standard were applied to Fannie Mae as bank of America Fannie would still have needed government assistance. It started with less capital and more levered than BofA. But the position would not look anything like as bad as it does.

You can of course interpret this to suggest that the Fannie Mae standard should be applied to BofA – and indeed to the rest of the financial system. You would (in my educated guess) be wrong. But I would have little ground to dispute it.

Disclosure: Long preference shares of the GSEs, long Bank of America. Could be wrong about both.


Kyle F said...

So how does this report jive with your previous (stellar) posts on the future of FNM? Does it change your position at all?

John Hempton said...

Credit losses - actual cash cost - was in line.

Net interest income was higher than estimate.

Delinquency slightly worse than I thought.

Foreclosure inventory lower than I thought.

The issue is that the accounts make no sense at all in a bearish sense.

And the amount owed to the government is a problem because it yields 10% and I wish I did not have to pay it.


John Hempton said...

The change in the position really comes down to malice or intent... are the results being reported so bad because someone wants to kill the GSEs.

Its bad for GSE holders to report bad results because - well they wind up owing the government more even if the bad results are reversed over time.


Kyle F said...

The comment about how the div pmts will be higher than their annual NI for the past few years is pretty rough.

John Hempton said...

Agreed. If the company is going to have huge (hut false) losses you will need the company to have huge (and equally false) reversals.

And then they will need to earn a decent yield on that stuff - which I think they can.

But the negative carry - about 5% of the money raised - is horrible...

Just horrible.


Kyle F said...

I anticipate that if they continue to sustain enormous losses, they'll stop paying the dividend, and Treasury will just write-off some amount of it in the far flung future (or perhaps not far-flung a la autos), in the hopes that the populist outrage will be muted by the passage of time.

babar ganesh said...

BofA came into the crisis with much higher capital levels that Fannie. Fannie has to catch up, and it is painful.

the correct comparison is the ratio of provisions to NPLs, not the change in provisions due to changes in NPLs.

right now (3Q) fannie has set aside 64B on roughly 200B of NPLs, or roughly 32%. what is the ratio at BAC?

John Hempton said...

Babar - I strongly disagree.

Fannie did come into the crisis with MUCH less capital - and it would be book value insolvent even if properly reserving. (It is massively book value insolvent - but I agree it would have failed).

But - remember the relationship between NPLs and losses differs a LOT by type of business.

An NPL mortgage with an original 60 LTV (person lost their job) comes with almost no loss. Even in California.

By contrast an NPL credit card usually charges off at 100 percent.

Rough numbers - Fannie had 170-190 billion in NPLs and 2.2 billion in quarterly charges. I think those quarterly charges will go to 4-5 at peak - 20 per year.

BofA had 30-40 billion of NPLs and has 9 billion of quarterly charges. BofA NPLs are FAR more likely to charge off at high rates.

Most of Fannie's book is pretty good - indeed the vast bulk of mortgages in America remain as good loans.

BofA NPLs mostly go bad. Fannie ones do not. And that has always been the case - good times and bad times.


But the regulatory problem was clear. The GSEs would have survived if they had come into this crisis with as much capital as the average bank and had the government been willing to let them survive.

They clearly came into the crisis with WAY too little capital.

I think Fannie could have - like BofA - declared an essentially break-even quarter and it would have been just as honest as BofA's essentially break even quarter.

But Fannie could not have pretended it was positive capital. Fannie was wiped out this cycle. I do not doubt that. I doubt the CURRENT ACCOUNTING of that wipe out.


Harry said...

Mr. John Hempton,

Do you think that there will be a preferred stock to common stock conversion?

If so, would preferred stock holders receive par?

Personally, I speculate the treasury to announce a deal similar to C.

John Hempton said...

Honestly I have no idea what the Treasury envisages. If you know let me know. (:

But the look of this is not good. Nobody has any reasonable estimate as to the end credit losses so they provide the maximum you can without falling off the chair.

That does not bode well for the preferred even if value remains. And I think value remains... but I am not sure you will get it.

Whole thing depends - as always - on government policy.

babar ganesh said...

john --

i agree with everything you are saying except that the comparison in your note doesn't prove your case. comparing a rate of change to another rate of change doesn't show anything when one institution starts behind the other. if i run three miles farther than i ran yesterday and you run four miles farther than you ran yesterday, nobody can say who is ahead.

your conclusion makes sense, not your argument.

i ran through the bofa 3Q numbers as well and they show a decreasing ratio of provisions to NPLs, which i would read as saying that the worst of their crap is getting cleared away. i wonder if you can say that with FNM at this point.

i also agree that the situation is politically suspicious and that the 10% draw is unreasonable and crippling, but it is a fact at this point.

Harry said...

The good news is that the democrats are in power and that is good news for the GSE's.

One way or another, there will be no complete wipeout and there will not be any new GSE IPO.

Chances are, in Feb. 2010, the treasury announces a few cosmetic fixes with tighter regulation and perhaps a conversion which will give the GSE's positive net worth.

By 4Q, both GSE's would be posting profits, just in time before the Feb. announcement.

Preferred stock being wiped out is like Leh and WM scenario, which is not going to happen with GSE.

-Thank you for always posting great things Mr. Hempton.

Unknown said...

Well it's all shooting darts in the dark until someone actually knows what the govt will actually do. Suppose they can also jack Freddie results around too.

lol said...

I wrote a similar article on this subject earlier last week. However, my post was not as in depth and insightful as yours. Instead, I did a "quick and dirty" rundown of Wells Fargo and their commercial real estate loan loss provisions. I completely agree how banks seem to be "adjusting" their way to profitability. However, it just makes future recognized losses that much larger.

For example, most analysts have been projecting a 4.1% default rate on commercial real estate loans while management settles around an "estimate" of 3%. This 1% difference could mean almost $8 billion in loan losses that need to be recognized (4% x $800 million in loans - current loan loss reserves of $24,028 million).

Of course, this is in NO WAY an accurate estimate of actual loan I said it was just a "quick and dirty" fact check on management's assumptions.

Anonymous said...

"The charge offs were 10.9 billion (see table 10 in the 10Q). Note 3 to that table tells us that of that 10.9 billion 7.7 billion came from the “loss on acquisition” on the HAMP. The actual loans that were charged-off (final) were 2.2 billion."

Shouldn't actual charge-offs be 10.9 - 7.7 = 3.2 (billion)?

John Hempton said...

Corrected. Funny my pencil notes had 3.2 - and somehow it got transferred to 2.2 which is roughly what it was last quarter.



Kid Dynamite said...

very interesting john - that you acknowledge that BAC is technically perhaps bankrupt, but given the extend and pretend playbook, you think that their model will work.

so you believe in "extend and pretend" ?

you are a better trader than i am - i could never buy a stock like BAC after I had done the work to show that it was likely insolvent, under the premise that perhaps they could fake their way out of it

Anonymous said...

There may be one simple reason that FNMA is reserving more than BAC - FNMA realizes that in the current political climate, gvt cash infusions are not a problem, so they are taking the worst-case scenario in order to receive as much cash as possible during these crisis times. Would also enable them, if the economy to turn around, to report profits down the road, which also would be a political winner.

Anonymous said...

There's no great mystery to the difference here and requires no conspiracy. The private losses of the banks have, and are, being transferred to the public via the agencies and Fed.

There's no reason for fannie and freddie to hide their losses, its a way to at least begin getting some reality into the books. Because at some point, there does need to be some real bookkeeping doesn't there. The agencies are the equivalent to treasuries at this point, so backed by the full faith and credit of the US, such as it is.

Now, BofA has no accounting standards as the government has waived the bullshit ones in play. To say they were better capitalized than the agencies is a bit of a canard, because if they had been held six months ago, BofA would be insolvent.

You've laid out well Ben's, Larry's Timmy's and the Streets hope, not so well the theft it's been based on, has as your implying it worked? Place your bets.

Anonymous said...

If the quarterly reserve build does not turn into charge offs, when would they be reversed on the balance sheets? For instance, this quarter alone, they have approximately 19B just in reserves. If these losses are not realized (and the same applies to all the past losing quarters), shouldn’t they start to reverse or at least accumulate so they would not have to build any NEW reserves?

Lilguy said...

Thanks for the balanced look at the provisions issue.

I'm thinking that 18 mos. may be a minimum time for this to work out, meaning some dicey months in between.

I don't own any bank or GSE stocks--and won't until the smoke (& much of the provisioning is) clears.

Anonymous said...

How long before Buffett or another big investor figures all of this out and begins accumulating shares? Not long I think.

Anonymous said...

Great post John, as always,

I just made the conclusion on the yahoo board, Fannie need to foreclose 920.000 homes to use the whole 69 BUSD reserve, at the current average charge-off per home 75.000 USD.

Fannie build reserves with 30-50% of NPL's in mind, this is insane.

Just 14% of homes have acurrent value over 100% of market value, and perhaps only 5% maximum is over 130-140% thus causing huhge losses.

Something is worng here.


go to the yahoo board FNM-PS its great

TheDrugsDon'tWork said...

I'm happy to run with the figures John H. has calculated. If you were to listen to this long but very interesting interview by Richard Koo, buried in it is a claim that Paul Volker interfered directly with bank provisioning during the South American Debt crisis of the eighties. Richard Koo describes it as a Provisioning Speed limit!

So are our regulators asking FRN and FNM to break the speed limit but BAC to keep to the speed limit? I’m jumping ahead and assuming similar conversations are taking place between the FED and Banks during this crisis – if you don’t agree with the assumption there is no point reading on.

The real owners of FNM and FRM are the bond holders at the end of the day – share holders and preference share holders are in a very stick position. From BSester’s superb blog my understanding is that these bonds are largely held by Central Banks particularly China. I enclose a particular post to back up my scantily researched background.

I would assume the Central banks – who realistically can’t extricate themselves from this quickly – will be particularly interested in the provisioning. Will they be happy that these agencies are being propped up by Government infusions? Yep. Will they be happy at a 10% coupon on these loans? Nope, unless they are sure the bonds will pay out their coupon and par. Doesn’t answer the preference share question!

I agree with John that banks in America don’t like Frannie and Freddie but I don’t think it is a simple to assume these entities can be dismantled without offending some very powerful central banks!

Finally (and this point again only loosely ties up with the points above) could the government be provisioning these organisations in order to set them up as MORTGAGE BAD BANKS. The Chinesse bank has quite a lot of solidity and could hold the American toxic assets to maturity. In this scenario sadly I think the shareholders and preference holders would be totally wiped out. Then BAC, C, et al could ditch some of their toxic assets for the Chinesse to hold

Although the Bond holders would be hit for a few years the Chinesse would only be concerned if over the long term their investments fell. They would not care about mark-to-market. Surely these assets would recover in run-off but the government infusion/provisions act as an investment in good faith. The Americans are putting some skin in the game but at 10% that skin will peel away very quickly.

So is the over provisioning purely because the Fed has already made the decision and is slowly setting up the bad bank!!!! Sadly all very tenuous speculation on my part.

Cheers theDrugs.

Unknown said...

I would like to discuss solution. What is needed is an improvement in the financial condition of a large portion of the consumers. If this occurs the housing market will correct itself. Go to for ideas on how this can be done.

Unknown said...

Every quarter that Freddie does not draw (and fair value increases) makes it harder for the govt to take away potential preferred value by a hasty good/bad bank decision. Eventually the marks have to reverse more dramatically.

C. David Kirby said...

I'm not persuaded that FNM is over-reserving. FNM has had large reserve builds over the last year because its NPAs have increased from $64B to $198B. Their reserve today stands at 33% of their NPAs, which seems no more than adequate, especially since their loss severity has deteriorated from 28% a year ago to 38% now.

I concur with you that BofA's reserving is reasonable. When comparing BofA to FNM, it is essential to take into account that FNM is a monoline mortgage bank whereas BofA is multiline. Here are BofA's 2009 3Q figures for residential mortgage only:

NPAs $15.5 B
Prov. $1.6 B
CO $1.2 B
Reserve $4.5 B
Res/NPA 29%

BofA's residential mortgage NPA's increased by 14% from Q2 to Q3. FNM's increased by 16%.

I would say that BofA's and FNM's reserving practices seem comparable, taking into account their respective mortgage NPA balances and rates of deterioration. What is not comparable is their charge-offs as a percent of NPAs, which is much lower for FNM. Why, I'm not sure, but my guess is that FNM is simply slower to charge-off bad loans than BofA:

"When we determine that a loan is uncollectible, typically upon foreclosure, we record the charge-off against our loss reserves." (p.39, FNM 10Q, 2009 Q3)

"our requirement that servicers pursue loan modification options with borrowers before proceeding to a foreclosure sale, along with state-driven changes in foreclosure rules to slow and extend the foreclosure
process, have resulted in foreclosure delays and longer delinquency periods."
(p.26, FNM 10Q, 2009 Q3).

"The outstanding balance of real estate secured loans that is in
excess of the property value, less cost to sell, are charged off no later
than the end of the month in which the account becomes 180 days past
due." (BofA 2008 Ann. Rpt., Note 1).

In other words, FNM charges-off at foreclosure, BoA at 180 days. And the foreclosure process is being slowed down by mitigation programs.

FNM's disclosure that its loss severity rate is 38% together with its rapid reserve building imply that large charge-offs are looming. I would not bet against this implication.

As for BofA, I believe their charge-offs will peak at around $10-$11 B in 2009 Q4 or 2010 Q1. I doubt they will go as high as $13 B, and the $30-$35 B scenario has zero likelihood unless Whalen knows something the rest of us don't. He always has the air of knowing a lot that the rest of us don't, but his dire prognostications haven't panned out so far. In early 2009, he said the government should be ready to seize Citi because its Q1 would be disastrous. It wasn't. He has also said that JP Morgan would not be able to "outrun the economic tsunami". So far, it has. He also predicted in early 2009 that Citi and BofA would be nationalized in 2009. They won't be.

Why do you think Whalen is wrong about securitization liabilities rendering BofA insolvent?

I enjoy your blog. It is rational and sensible, which is not always the case with internet financial commentators.

--C. David Kirby (former CPA, long on BofA)

Anonymous said...

Are there any outside reasons for what seems like over provisioning in the case of FNM?

erica said...

John, do you answer questions on TPM or should TPM posters post here?

John Hempton said...

I answer questions in both places if I am not too lazy.

I just went and answered a question at TPM. I guess it was yours.


Anonymous said...

Could someone please post me to the "TPM" message board.


Anonymous said...


Thanks again for your work on the agencies. I have a few questions.

1) What is FRE and FNM exposure to mortgage insurers? Any thoughts on impact if FRE and FNM is unable to get claims?

2) I am perplexed as to why the government didn't work harder to work something out with the preferreds in Sept 08. Others have noted that they could have moved to guarantee the preferreds and lowered rate. This could have averted a great deal of pain for the banks that owned the preferred.

3) Given the fact that the Gov didn't deal with the preferred in Sept of 2008, I am finding it less likely there is any value in the preferreds, since the pain is already felt. Again this is the political risk that no one has a handle on. Is there anything to make you beleive that they have to deal with the preferreds in a equity conversion scenerio or utility model. IF yes, what do you see as an outcome? $.15 on the dollar?


Maria said...

John, I have a question, how does FASB 166/167 jive with REMIC legislation?

If the CMO is pass-through, and cashflows are sold, what assets and liabilities will appear? FRE market value of CMOs vs similar to underlying collateral has a huge difference due to GSE guarantees + private insurance + reinsurance + difference in the collateral. Plus the FED is buying CMOs too, so they are way more expensive then collateral. Are they going to record fair value of all those spreads spreads on the whole $1.8T book? It's a meamingless number until the call of a CMO, and it's a pure guarantees book. It is under guarantee business now, but is it not completely insane to bring assets and liabilities on the books?

Isn't it the same as saying all insurance companies are insolvent? It's the same thing as forcing CAT to keep sold machinery on the books and match them to current market values. This FASB thing is in direct conflict with REMIC, and it double counts the money required to maintain CMOs. That's my guess as to why CMOs are not issued. Doesn't it kill liquidity in MBS and all ABS net of TALF markets next year if it goes through? Who will buy all these unstructured pools of mortgages and other loans at par? Who needs that many loans pools? They addressed mark to market, but this new regulation basically makes securitization prohibitevely expensive.

John Hempton said...


I am not sure how FASB166 and 167 will be implemented - but it will have some bizarre effects.

On the balance sheet it will no longer be possible to tell the difference between the guarantee business and the portfolio business.

Given the (political) issues are about the size of the portfolio business that will be odd. Nobody seems to worry about the guarantee business.

Fannie suggests in their Q that it will cause large accounting losses. Freddie says that the effect is uncertain - but as they describe it they thing the accounting loss effect is trivial because they can't value the stuff they are putting on their balance sheet anyway - so they will bring it on at historic.

But if you are asking this question you are probably as sophisticated as me on this...

Send me an email.


TheDrugsDon'tWork said...

I thought this was a good sign at least BofA is really calling the bottom of the American housing market

Anonymous said...

John, We need some good news from you about FNM and FRE.

TheDrugsDon'tWork said...

Interesting about FAS166 and FAS167

Anonymous said...

Coverage of NPAs versus recent loss experience would be a better way to look at the comparison between FNM and BAC. Current snap shot.

TheDrugsDon'tWork said...

More FASB 166/167 if anyone cares

Thedrugsdon'twork said...

The preferreds have moved to the pink sheet. Sure you're busy but do you have any view on that?

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