Breaking the buck

Here is banking at it's finest. Lend option ARMs to people who opt to take the option of not paying interest. Book all the amort as earnings, and there you have it a cheap bank stock.

DSL - Downey financial has net cash outlays for their loan portfolio. So their Net interest Margin - expenses - non cash interest is negative. How long can that last? Any financial wizards that can figure out how that ends up.

Also delinquencies have nearly doubled in 6 months so expenses to service loans could go up four fold.

This is at it's 2 year low. Do not buy. Sell.

Low and going much lower. Downey Financial*

Note: this is not subprime either, it is simply poor lending.