The Fifth Reverse Horseman: PACW

I really want to make [[CATY]] the fifth “Reverse Horseman,” but I can’t. I must anoint the morons at [[PACW]] with this ungodly title, who, without doubt, are very busy eating through capital like pacman—as you read this.

Basically, PACW is a play to bet against the California mortgage market, like [[DSL]] and [[FED]]. For fucks sake, they lost $10 per share last quarter.

Look for a dividend cut, as the credit markets worsen.

As for CATY:

It’s a perfect blend of Chinese fuckery and bad California mortgages and HELOC’s. Cathay services the Chinese-American community, in the most egregious fashion—via bad loans.

Basically, on face value, CATY appears to be handling the ‘credit crisis’ quite well. However, I believe they are greatly understating their bad loan exposure. On top of that, the company, egregiously, bought back 2.8 million shares @ $32, in 2007, burning through 92 million dollars.

For now, my top bank shorts are “The Reverse Five Horseman”: [[DSL]], [[FED]], [[FHN]], [[CORS]] and [[PACW]]. Also, I think there is considerable downside in CATY, [[EWBC]], [[CSE]], [[WTFC]] and [[BBT]].

NOTE: Pardon my misstep with the financials, during yesterday’s tape—via buying some. What was I thinking? Aside from [[UB]], I am back to betting against them.