The 1.3 billion mentioned in a prior post were of Mortgage backed securities were purchased from Fannie and Freddie. There is no 75% haircut on such paper. Here are some quotes I got today: Fannie Mae 4% 2010 98 1/2 Yield to Maturity 4.6% Fannie Mae %5 2017 99 1/2 Yield to maturity 5.1%
In my opinion CATY bought Fannie paper instead of creating or purchasing sub prime crap mortgages.
No way will CATY's equity be wiped out by write offs.
You need to account for the loss on the $ 32 million preferred stock of Freddie and Fannie on the book and the the $ 156 million of mark down on the $ 211 million of CMO on the book. Caty has a big write down coming for year end.