Continuing the series…
National City Corporation has $154 billion in assets, $101 billion in deposits, and $136 billion in total liabilities. So you can think of it as five IndyMacs or half a WaMu.
NatCity is counterparty to $23 billion in derivatives used as hedges (page 53); this is essentially just insurance they have purchased on their own portfolio. But they are also counterparty to $42 billion in other derivatives trades (page 54). I am not sure what the status of these contracts would if the FDIC were to handle NatCity the way it handled WaMu. If they can wipe out unsecured bondholders, what about CDS counterparties?
The stock is acting like it is going to zero.
I predict Wachovia will be next.
Wachovia Begins Early Deal Talks with Citi