A Real Mess Brewing

By now everyone has heard about the group of institutional investors led by mega bond fund Pimco that has notified Bank of America that they want to "put" or sell back about $16 billion of bad mortgages. The attached piece does a good job explaining the mess and initial push back from Bank of America. Some estimate that as much as $150 billion of mortgages may be sold back to the big banks. One of the many problems, however, is the big banks - Bank of America, Citibank, etc. lack enough in reserves to cover this...can anyone spell "bailout"?