Great clarification, fsd. Sounds exactly right to me. Also sounds like you should be the one writing for the Financial Times…
BTW, I wasn’t aware that Wells was so exposed in the Option ARM segment. I understand they have a problem with HELOCs. What does their balance sheet look like with respect to the Option ARM products? If they originated the products but sold them off to MBS investors, are they still on the hook in terms of their balance sheet? Servicing revenues? Where do they take the hit? What’s their liability?
Up to this point, I hadn’t grouped them into the Wachovia/Wamu set. Looking for comments on why I might be wrong…
