Another WaMu washout
Almost lost in the hubbub surrounding Bear Stearns’ (BSC) brush with insolvency was Friday’s downgrade of another troubled mortgage player, Washington Mutual (WM). WaMu shares dropped 12% after Moody’s cut the Seattle lender’s senior unsecured debt rating to Baa3, the lowest investment-grade level, from Baa2.
Moody’s cited “the rapid deterioration of the residential housing sector in the first quarter of 2008 and the resulting increase in expected provisioning needs on WaMu’s residential mortgage loan portfolio.”
Moody’s said it now believes WaMu is likely to have to set aside more than $12 billion for future loan losses - and that full year 2008 net losses could eliminate WaMu’s $6 billion regulatory capital cushion.
“Although in the fourth quarter the company raised a significant amount of hybrid capital and reduced its dividend, we believe WaMu’s necessary provisioning could reduce capital to a point that would lead to further downgrades in 2008,” the firm said. “There are actions management can take in 2008 to address this, including raising additional capital, reducing assets and further cutting the dividend. However, the negative outlook reflects the uncertainty around the company’s ability to replenish capital.”
FWIW, I am a WaMu customer. I am a bit concerned. I don’t know what a bank run looks like, or what would happen exactly if I were to lose contact with my money. Fortunately I don’t have a lot to lose contact with! Ha ha.
Nevertheless, who’s to say I don’t want to lose access at any time or for any amount of time! 1 or 2 hours? No big deal. 1 or 2 days… mmm… 1 or 2 weeks… forget it!
So, in preparation for what might be, or could be… I’ve decided to spread the risk. I’ll keep some in WaMu, but I’ve openned an additional account at another institution and hope they too, are not too exposed to this.
I also keep more cash on hand… and stock up on a few canned food products. I love New England Clam Chowder!
Leamans and WaMu going under soon it’s the 30’s all over again…which one are you and arkie or and okie. This is very scary stuff.
AS THE FED RATE FALLS IT’S JUST A MATTER OF TIME BEFOR THE THE REFI’S START. WAMU SELLS MONEY THATS THIER PRODUCT, LET THE SELLING BEGIN
dear posted by ‘anonymous” aka short seller, spreader of falsehoods. Please leave the fear mongering at the door… The Feds are watching you. IP address known… federal crime to lie about such facts.
I just logged in and it’s working for me
I’m under 100,000 so I’m safe FDIC stuff …at least for now 
How come nobody’s saying anything about the bank run Washington Mutual is suffering?
They’ve shut down online banking (they’ve been offline for about 24 hrs now) and they won’t let you talk to anyone when you call their customer center.
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To Brandon, Even at WAMU, you can spread your money around into multiple depositary accounts to stay under the FDIC thresholds and eliminate your exposure to the institution’s individual credit risk. For example, if you are married, separating a joint account into two separate accounts under $100,000, or into separate savings and short term CD’s can reduce your exposure to an institution’s credit risk. Most of these companies are very willing to work with you to keep the deposits in-house.