Saturday, September 27, 2008

I hope NCC doesn’t put me in line

I’ve forgotten about BUD and concentrated on National City this morning. Another analyst, Fox Pitt, raised the stock to Outperform before the market opened. The JPM marks on the WaMu portfolio were not terribly out of line with what NCC could handle quite easily.

However, a run was the straw that broke the camel’s back at WaMu. Now WM was only 1/2 funded by deposits and their debt was shakier than NCC’s. NCC is a net seller of fed funds and euro dollars. They also have about 3 years of cash at the holding company level to handle future years debt maturities without upstream dividends from their banks. The fed’s discount window can fund any deposit run, within limits. So everything should be ok. But investors are running for safety today and they don’t care. They don’t want to be wiped out like the WM shareholders.

You may see me on the breadline or at your doorstep if NCC does follow WM. I’ve bought 3 times so far today and it keeps going down. I’ll probably put some more money to work before the day is over. then I’m off to Vegas to visit Neil. Gambling out there will be childs play.

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