Washington Mutual’s Credit Rating Cut To Junk Status…Next To Go?
The Seattle-based thrift late Thursday said it expected this quarter to set aside $4.5 billion for credit losses, down from the second quarter’s $5.9 billion, and write off $2.7 billion for bad loans. Moody’s Investors Service cut its credit rating to “junk” status.
Washington Mutual also said it had $50 billion of liquidity from “reliable funding sources.”
This language was reminiscent of language that Countrywide Financial Corp, then the largest U.S. mortgage lender, used in August 2007 when it said it could access $46.2 billion of “highly reliable” short-term financing. Less than two weeks later, it drew down an $11.5 billion credit line.
Oh goodie, only $4.5 billion in credit losses this quarter. How…comforting.
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Ron@TheWisdomJournal | Sep 12, 2008 | Reply
Just a thought, but if they have more in assets than the market capitalization of the stock, could it be a buying opportunity? I had a friend that bought 100,000 shares of HealthSouth (hospital) stock at 11 cents when they went through something similar to Enron. He spent $11,000 on it when the market cap was only $1.5 million. Heck, just one of their 200 hospitals was worth more than that. He sold his 100,000 shares when it hit $5.
I don’t know if WaMu would do anything near to that, but it might be worth a look. What do you think?
David | Sep 12, 2008 | Reply
Hey Ron, I doubt WaMu will go under -but then again, look at the ones that have. I am not in a buying mood at all right now but I know many are. I suppose if you are going to buy, definitely only buy companies that stand a chance in hell of surviving this, as some of their numbers are showing that they probably will…
Matt @ Steadfast Finances | Sep 12, 2008 | Reply
I may be taking away some of my beloved stock volatility, but this game of “are they going under or aren’t they” is really beginning to feel like a band aid being pulled off at a snail’s pace. Just rip the thing off already!
It will be fun to see the actions taken over the weekend by Paulson and crew regarding Lehman.
stocks | Sep 13, 2008 | Reply
Yeah, I think WaMu is next, particularly since Freddie and Fannie went down..
Keep in mind that CountryWide needed a buyout in order to be saved, and they were considered a major player, bel-weather like even…