ZOMBIE BANKS...........read more from institutional risk analytics...
"No prognostication about the future of the zombie dance queens would be complete without an apocalyptic event, an all-shaping catalyst for changes in asset allocation and risk appetite. As readers of The IRA will recall, we have been advocating a court supervised restructuring of several of the largest loan servicers, including BAC and Ally Financial. First choice is a court appointed receiver, but a bankruptcy will get the job done as well.
The down side of an Ally bankruptcy filing is that it may well precipitate a BAC restructuring. The headline shock of an Ally filing may open the eyes of the happy campers in the hedge fund community when it comes to the remaining legacy risk inside the zombie dance queens. BAC is the largest remaining pool of servicing risk, followed by WFC, C and JPM. Like Ally, BAC is badly in need of a court-supervised process to settle claims and end the uncertainty regarding the largest US loan servicer. Just remember that Aurora is still operating - and is for sale -- inside the Lehman bankruptcy estate, so yes BAC can be done."
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