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.