Last rites for WaMu?

[marmar]

from MarketWatch:



WaMu shares slump 30% on renewed credit concerns
Lehman's latest mortgage write-down highlights continued housing pressure
By John Spence & Alistair Barr, MarketWatch



SAN FRANCISCO (MarketWatch) -- Washington Mutual Inc. shares slumped 30% on Wednesday as concerns about the ability of the nation's largest thrift to survive the credit crunch increased.

WaMu shares close down 98 cents at $2.32, their second-biggest drop ever. The stock was off 5.2% in after-hours action.

Spreads on credit-default swaps on WaMu's debt widened by roughly 400 basis points to 2,200, according to Credit Default Research. That's up from less than 1,500 basis points earlier this week.
Credit-default swaps are a common type of derivative contract that pay out in the event of default. When the difference, or spread, between rates on these contracts and rates on U.S. Treasury bonds increases, that suggests investors are willing to pay more to protect against defaults.

Standard & Poor's Ratings Services late Tuesday said it lowered the outlook on WaMu to negative from stable. "The outlook revision reflects the increasingly challenging housing and mortgage markets and their impact on WaMu's core mortgage franchise," said Victoria Wagner, an S&P credit analyst, in a statement.

WaMu earlier this week ousted its chief executive and announced a deal with regulators, which essentially puts the bank on probation. See previous story.

Earlier on Wednesday, Lehman Brothers unveiled another $5.3 billion of residential mortgage write-downs. That renewed concerns about WaMu's massive mortgage portfolio. ......(more)

The complete piece is at: http://www.marketwatch.com/news/story/wamu-shares-slump-30-renewed/story.aspx?guid=%7B3732347B%2D809B%2D47B3%2D9354%2D47A6294E4EA9%7D&dist=hplatest

[Taverner]

1. I don't pray for the downfall of any home lender

The more they go down, the harder it will be for the average American to buy a home.

And WaMu was one of the better ones...

[lifesbeautifulmagic]

2. wamu is my bank

sheeit.

[Hawkeye-X]

6. Dump 'em - go to a Credit Union - you'll get a better rate

Hell, I got a CD rate for $500 at 3% interest - pretty damn good for 6 months!

[Suich]

7. Me, too!

And I don't have the faintest idea what to do! What will happen to my checking acct.?

I hate this crap.

[TheWatcher]

10. WAMU WAS my bank.

I had a business account with them for eight years and closed it out last month.

The writing has been on the wall for some time.

[Robb]

3. The question I never see answered

...is what happens if your money's in the bank, or they hold your mortgage note, and the sucker goes under? Another bank buys up?

What's the "boots on the ground" in this? I'm just a tad ignorant.

[soothsayer]

9. bank account insured by fdic (up to a certain amount )

and your mortgage note has probably already been sold as part of a bubndle of mortgage backed securities. (that is, fannie or freddie may have bought them and then sold them off to investors.)

[Auggie]

4. One more taxpayer bailout?

[Hawkeye-X]

5. Finally transferred TWO WAMU CC's worth $7K this week

out to American Express with 4.99% interest for the life of the balance. They charged me 22% and 20.16% interest respectively. All we have been doing is paying the interest, not the principal. With AE, we'll pay down the principal (finally)

Fuck em and the horse they rode on. Let them choke.

Hawkeye-X

[MrsCorleone]

8. I do not want Wamu collaspe.

This will be bad. I would rather lose my investment (holding ultrashorts) than see this bank go down.

[seemunkee]

11. Wonder who will buy my mortgage

Wamu bought it 6 years ago.

[cui bono]

12. Thanks for posting. Moving my savings to a credit union tomorrow. n/t