For those that don't subscribe and wonder what is behind the firewall, we have analyzed the CDS exposure that Wells has, or at least that Wells has reported. If you recall, there was a blog story that broke a few weeks ago detailing the CDS exposure that WaMu had to CMBS from writing protection on the risky tranches in a bid to get investors to buy the securities. Wells inherited this alleged problem in their purchase and it seems as if they may not have even been aware of it. Well, we performed a deep dive and came up with the likely capital calls, as well as some other very interesting tidbits...
Although the CDS thing made it across the blogosphere, the more
immediate risk to WFC lay elsewhere, as I have detailed in the research
note above.That is not to say that there is nothing to fear from WFC's CDS exposure, though.