WaMu: Ouch.

As the mortgage market experiences continuing turmoil, our local giant in the industry is not spared:

The nationwide housing slump and collapsed mortgage markets have taken yet another toll on Washington Mutual — specifically, on its employees and shareholders.

The Seattle-based thrift, one of the nation’s largest home lenders, said Monday it will:

  • Cut 3,150 jobs, mostly in its struggling home loans business;
  • Shutter nearly two-thirds of its home-loan stores;
  • Close its 5-year-old mortgage-backed securities brokerage;
  • Slash its quarterly dividend to 15 cents per share, from 56 cents.

The company also said it would sell $2.5 billion worth of convertible preferred stock. That, along with the dividend cut and the other closures and reductions, should give WaMu $3.7 billion more in capital to work with as it tries to ride out the nation’s worst financial crisis since the savings-and-loan debacle of the late 1980s and early 1990s.

Don’t think that if the economy as a whole takes a downturn that our giants in other industries will somehow be spared, either. But hey, Seattle is Special and all real estate is local, right?

(Drew DeSilver & Melissa Allison, Seattle Times, 12.10.2007)

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About The Tim

Tim Ellis is the founder of Seattle Bubble. His background in engineering and computer / internet technology, a fondness of data-based analysis of problems, and an addiction to spreadsheets all influence his perspective on the Seattle-area real estate market. Tim also hosts the weekly improv comedy sci-fi podcast Dispatches from the Multiverse.

130 comments:

  1. 1
    notabull says:

    “Washington Mutual said it would cut its dividend to 15 cents from 56; slash more than 3000 jobs citing mortgage woes. Stock tumbles.”

    This was just posted on money.cnn.com. I’m sure they’ll be some more details out very shortly.

  2. 2
    notabull says:

    From Reuters:

    ” NEW YORK, Dec 10 (Reuters) – Washington Mutual (WM.N: Quote, Profile, Research), the U.S. savings and loan slammed by slumping mortgage markets, on Monday said it would slash its dividend, cut more than 3,000 jobs and announced a $2.5 billion capital infusion.

    The Seattle-based bank also said it expects to report a net loss in the fourth quarter after recording non-cash write-downs.”

    I hope there are not too many jobs lost in Seattle, but this is the HQ so I suspect there will be a lot. I do, however, expect a large chunk to come from their “Home Loan Center” locations that seem to be everywhere now.

  3. 3
    Bellevue Ave says:

    Wamu being beaten like a baby harp seal

  4. 4
    Matthew says:

    WAMU getting roached afterhours… Maybe they will convert the HQ to condos…

  5. 5
    David McManus says:

    Couldn’t have happened to a nicer lender.

  6. 6
    notabull says:

    Just last week I was in the local WaMu branch noting their insanely good rate on a 9 month CD (I think it was at about 4.9%) and I said to my wife, “Wow, it looks like they need the deposits”….

  7. 7
    David McManus says:

    I guess this is a buying opportunity, right? Sink all of your retirement money into WM NOW!!!

  8. 8
    David McManus says:

    Sorry….should have included the “sarcasm” tags? Tim, is there a way to escape the “

  9. 9
    David McManus says:

    ….. now the rest of my comment. Tim, is there a way to escape the signs in the comments. I try to use “sarcasm” tags and the server is trying to parse it as valid HTML.

  10. 10
    David McManus says:

    — BEGIN QUOTE
    “We had no clue this was coming,” said one Seattle-area loan consultant who has worked at WaMu for five years. “The market’s slow, but that just means you call old clients and things like that.”
    — END QUOTE

    Mouth agape. You’ve got to be kidding, right?

  11. 11
    Bellevue Ave says:

    call old clients? like old people, or people who already bought your flim flam and shim sham in 2005? old clients!

    how about this WaMu, offer me a 5.05% APY for my checking account and I won’t switch banks.

  12. 12
    The Tim says:

    David,

    type > and get >
    type &lt; and get <

  13. 13
    b says:

    What are the odds of a WaMu bank run now? Looking at what happened to e-trade, they must be very worried.

  14. 14
    Jess says:

    Only having a checking account at WAMU means we’re OK, right? Sorry for the basic question, non-biz school humanities-folks lurk on this site, too.

  15. 15
    rose-colored-coolaid says:

    Jess,

    Sort of. Your checking account should be FDIC insured.

    What this means : you will get at least $100,000 returned to you eventually if the bank collapses. The eventually is important, because I don’t really know what that means. Days? Weeks? Months? Years? I think it depends on the magnitude of problems, but any of the above are conceivable.

  16. 16
    b says:

    Jess,
    Theoretically you are OK as long as its less than 100k, since the FDIC has never really been used for a large bank its unknown how long it would take to get your money back. If that is the checking account you use for everyday expenses, you may want to consider switching to another bank in the event of a disruption. I think BoA is really the only large one that is semi-safe at the moment.

  17. 17
    Bellevue Ave says:

    the problem of changing from WaMu to another bank is going through and updating all electronic information for credit cards, etc.

  18. 18
    patient says:

    I think the $100k FDIC limit is per person so if you have say than $120k in your name and is married you could for example add your spouse to the account/s and the full $129k would be insured, right?

  19. 19
    patient says:

    Oups, it should be “the full $120k”. The unknown time period to payout would still be an issue though…

  20. 20
  21. 21
    S-Crow says:

    FDIC insured accounts? Heck, freezing rates on contracts for loans seems to be the flavor of the day. Who knows if FDIC will be tested in the future. Don’t want to see it by all means, but if the financial system becomes really under duress, all bets are off I would imagine. In theory you are protected, but in reality, that is a whole different question.

  22. 22
    Markus says:

    Move your money to Presidential Bank at http://www.presidential.com
    They pay great rates (I think just under 4% right now in checking) plus free bill pay. My account has been thier since 1998 and I never had a problem. Customer service is great too. Do a simple Excel chart and see the difference 4% vs. 1% makes in one year on your monthly balance.

  23. 23
    patient says:

    Thanks for the link b.

  24. 24
    Bellevue Ave says:

    second question; I have a credit card balance with WaMu. If WaMu goes poof does that balance get transfered elsewhere?

  25. 25
    confusa says:

    WAMU is indeed in trouble. Here is a lovely graph of their subprime exposure:

    http://www.nytimes.com/imagepages/2007/11/10/business/11mozilo_graphic.html

  26. 26
    patient says:

    I can see it coming…
    -Don’t risk loosing your savings in a bank bancrupcy, buy a home now to secure your equity in a hard asset!

    ( Note, this is an ironic remark, not a recommendation! )

  27. 27
    deejayoh says:

    In other news, Merrill Lynch predicts a consumer recession next year, Morgan Stanley predicts an overall recession. Both stories hit today

    Merrill: Merrill forecasts gloom for US economy
    Morgan: Mild recession likely, Morgan Stanley says

  28. 28
    Running on the wheel says:

    WaMu’s retail banking and credit card business lines are its strenths. These cuts, and capital announcements, have to do with protecting it’s exposure to home mortgages. You’re a long way from having to protect your savings account.

    Confusa, that chart seems to present # of loans not % of all business. Isn’t that key?

  29. 29
    deejayoh says:

    Oh, and as Mr Hankey says, I guess this “Merry Effing Christmas”, The WaMu Way&copy

  30. 30

    I subscribe to Market Watch and watched email updates on WaMu today…including that they are shutting down 190 home loan/sales centers.
    http://www.marketwatch.com/quotes/wm

  31. 31
    AndyMiami says:

    Guys,

    What is interesting about WAMU’s $2.5 billion convertible preferred stock offering is that it’s just that, an offering. Others, such as UBS today and Citibank, were able to sell their offering to private offshore funds. WAMU is relying on the Morgan Stanley’s of the world, the same folks that packaged all those no doc loans…let’s see how successful they are and if WAMU pays a higher dividend on the preferred than the 11% that Citi is paying…the cost of the BUBBLE and Seattle will feel its effects…stay warm and cozy and make sure you watch your WAMU accounts

  32. 32
    Matthew says:

    All I know is that I am buying more WAMU puts tonight!

  33. 33
    NostraDamnUs says:

    Here you go Timmy – http://www.kiplinger.com/magazine/archives/2007/12/home-prices-2008full.html, don’t say I never added anything in agreement with 90% of the collective, agreeable masturbators here.

  34. 34
    antiamerican says:

    Its interesting that WAMU is closing reatail loan operations. This is supposed to be the bread an butter of the new mortgage industry.

    Also, its not subrpime. Wamu is taking prime helocs, seconds, and arms up the arse.

  35. 35
    NostraDamnUs says:

    Tiny, small, miniscule silver lining – http://tinyurl.com/2w9hf2

  36. 36
    Lake Hills Renter says:

    My landlord works for WaMu. Fortunately, not in their home loans division, but still… *paranoid*

  37. 37
    wreckingbull says:

    Nostra, you aren’t really posting regurgitated NAR marketing material, are you? Seth Jayson has a little touch of gray for your ‘silver lining’.

    http://www.fool.com/investing/general/2007/12/10/down-isnt-up-really.aspx

  38. 38
    Brian says:

    I think you guys are blowing some of this out of proportion. WaMu is not as close to bankruptcy as you think. For that matter, neither are Citi or Merrill or any of the other major financial institutions that are having financial woes right now. WaMu’s stock may go down more, but eventually, stocks like WaMu or Merrill or Citi that have been depressed so much will end up making buyers in the stock now a lot of money if they are willing to wait. For anyone shorting WaMu right now, watch out for a squeeze in early 2008 when institutional investors start value shopping and you’re forced to sell. For anyone hoping for WaMu’s demise, 550 corporate jobs were eliminated and many of those are in Seattle. If WaMu goes down or gets purchased and purged you can bet another several thousand jobs will go with it in Seattle. With several thousand corporate gigs gone, you can only imagine what the overall economy is Seattle will look like.

  39. 39
    Matthew says:

    NAR says = Soon to be revised to accurate, more dismal number in a couple weeks.

  40. 40
    Brian says:

    Oh, if you have a credit card, home loan, or any other vehicle where you owe debt, the debt will be past on to another financial institution if WaMu goes under. I think anyone talking about FDIC insurance right now is overly pessimistic and somewhat stupid for lack of a better word (no offense).

  41. 41
    Matthew says:

    You are right Brian, the situation is not that dire. The Fed is only going to cut into positive GDP growth and increased wage inflation for the hell of it.

    In fact, Warren Buffet is going to buy Wamu, Citi, and CountrySlide, and everything is going to be ok!

  42. 42
    Brian says:

    Matthew, thanks for the sarcasm. I’m fairly certain the sky is also going to fall and aliens are going to invade and take over the world. I’m not saying what is happening right now in the financial industry isn’t bad, but I am suggesting that what is happening is not the end of the world some of you posters want people to believe.

  43. 43
    AndyMiami says:

    #
    Brian said,

    on December 10th, 2007 at 8:51 pm

    I think you guys are blowing some of this out of proportion. WaMu is not as close to bankruptcy as you think. For that matter, neither are Citi or Merrill or any of the other major financial institutions that are having financial woes right now. WaMu’s stock may go down more, but eventually, stocks like WaMu or Merrill or Citi that have been depressed so much will end up making buyers in the stock now a lot of money if they are willing to wait. For anyone shorting WaMu right now, watch out for a squeeze in early 2008 when institutional investors start value shopping and you’re forced to sell. For anyone hoping for WaMu’s demise, 550 corporate jobs were eliminated and many of those are in Seattle. If WaMu goes down or gets purchased and purged you can bet another several thousand jobs will go with it in Seattle. With several thousand corporate gigs gone, you can only imagine what the overall economy is Seattle will look like.

    Brian, you may be correct that the survivors, and maybe WAMU is one of them, will make great buys in 2008, or even 2009. I remember working for Bank of Boston in 1990 and watch their stock go from $40 to $4 in six months because of their New England real estate portfolio, mostly in commercial deals. Eventually, they came back and became part of Fleet Bank, and now Bank of America. Their CEO at that time became the Chairman of Bank of America, his name is Chad Gifford, good old Boston blue blood.

    But this time, some of the WAMUs will collapse because this has been a nation wide credit/real estate bubble with way too much leverage given capital requirements, and the off balance sheet (sh’t) loans which propelled leverage to 20 to 30 to 1 will kill them…

  44. 44
    Affluent Bitter Renter says:

    The WaMu branch in Portland near my house has a time and temperature sign – which has been broken for weeks. (The time is always midnight, and lots of bulbs are burned out for the temperature reading.)

    Guess somebody doesn’t have the money for sign maintenance…

  45. 45
    Brian says:

    AndyMiami, WaMu is much bigger, with a much broader asset base, than Bank of Boston was in 1990. Plus, the financial institutions with the biggest long term risks are the ones that trade/create the CDOs and SIVs, so we’re talking about the Bear Stearns, Merrill Lynch, Goldman Sachs, etc. of the world. No matter. Like I told the girl that works at Merrill Lynch on the bus ride home tonight, her company and companies like hers will just create other fake money instruments and magically make $1 turn into $11 and try to spread debt and risk on to others for a hefty profit anyway.

  46. 46
    Matthew says:

    Brian,

    The difference this time around is the scope and magnitude of the fallout. The spotlight is shining so bright on this companies, and the cockroaches are running everywhere. Mark to model is dead, mark to market is the new standard. The question is how many skeletons are left in the closet, my guess is that there are so many that they are scared for real transparency.

    The ironic thing is that the credit crunch has just begun, it’s only going to get worse from here on out.

    GOT PUTS?!

    BTW, funny thing that H&R block was supposed to report tonight and hasn’t. Wonder what’s going on over there???

    I smell smoke…

  47. 47
    AndyMiami says:

    Also, it’s not just about subprime loans…as a banker, if you have inadequate credit guidelines on a segment of your portfolio, most likely, the same management is applied to other segments, such as home equity, credit cards, car loans, commercial real estate, business loans, etc…and all of these loans nationwide are experiencing rapid delinquency rates..the credit bubble was not just about loaning Dick and Jane $700K on a combined income and not verified on $100K in income, it was about risk vs. return for all loans, and the packaging of these loans for sale to institutional buyers that re-leveraged the purchase of the original loans. So think about it, a $700K loan on a property were at best a buyer put down 5% is sold (in a CMBs) to an institutional buyer who also borrowed 90% of the purchase of that already leveraged initial asset purchase by Dick and Jane. And then ad the fact the the institutional buyer may have also sold in the derivatives market to either go long or short to hedge the risk, and those buyers also leverage that purchase…and this has happend with your BMW and Ford and Honda loans…THE BIGGEST BUBBLE IS CREDIT AND WE ARE GOING TO SEE LOTS OF PAIN UNFORTUNATELY…how often do you see people paying with cash, even for their coffee and lunch..

  48. 48
    Brian says:

    Matthew, don’t compare WaMu to H&R Block. Well, I do have to say I am amazed at how glum people can be when the chips are down. Like I said, there are more problems ahead, but man, some of you are a little too pessimistic for my tastes. The biggest bugaboo for WaMu is the sub-prime lending mess they got into. I personally don’t think it will take the company down seeing what their asset base is and knowing how many other business lines are profitable there. If you want to talk about skeletons in closets, I would look at Merrill, Bear Stearns, GS, Lehman, etc. since they are the ones trying to make $1 into $11 with their investment vehicles.

  49. 49
    Brian says:

    AndyMiami, I 100% agree. The credit market will most likely be screwed for years. Hopefully it will force financial institutions to stop giving out credit like it’s crack and force consumers to start living within their means. It’s doubtful most institutions/people will learn their lessons unless they are forced to feel some pain. The sooner the better in this regard. From what I hear though, most of the financial institutions are expecting the Fed to drop rates until they hit 2% sometime in the next year and a half. All we need is another Greenspan to make our dollar worth dirt and our debt to equal the worlds economy less the US.

  50. 50
    AndyMiami says:

    #
    Brian said,

    on December 10th, 2007 at 9:49 pm

    AndyMiami, I 100% agree. The credit market will most likely be screwed for years. Hopefully it will force financial institutions to stop giving out credit like it’s crack and force consumers to start living within their means. It’s doubtful most institutions/people will learn their lessons unless they are forced to feel some pain. The sooner the better in this regard. From what I hear though, most of the financial institutions are expecting the Fed to drop rates until they hit 2% sometime in the next year and a half. All we need is another Greenspan to make our dollar worth dirt and our debt to equal the worlds economy less the US.

    Brian, I agree that the Fed will do what it can and only lower rates, but this time, it may not work. It worked after 9/11, when the Fed should have let the economy go into a full blown recession, but now we will face a double whammy driven by distorted risk reward models that assumed that real estate always increases…young Wall St studs doing the models, just like in the 1999 .com boom…as long as a 28 year old makes $500K per year, they will believe anything. I cannot blame them..they are part of a small club and your judgment can be clouded…there will be movies made about this..the crack on wall st…part 1 through part 5, based on the years that we need to correct the mess started by Greenspan…the leader of the dealers…

  51. 51
    Kime says:

    I believe we will see some large banks go under before the crisis ahead is over. I don’t know if WAMU will be one of them, but I do know that they have had a fairly low rating from Weiss ratings since at least 2003 (C+ in 2003, I would guess that it is worse now). I checked because we had a great deal of money in WaMu that we have since moved. I believe it is prudent not to rely of FDIC insurance, (which is not designed to deal with a true economic crisis or with the problems with derivatives that some of the largest banks have so much exposure to), but to keep the bulk of your money in a higher rated bank, if you keep your money in the bank. We keep ours in Washington Federal Savings, which has had an A+ rating from Weiss for a long time.

  52. 52
    Matthew says:

    Brian,

    Who compared WAMU to HRB? I mentioned HRB in closing. Ironic that all this bad news is coming out today and the market is rallying on a potential cut.

    Auto Manufacturing = 2008 going to be rough
    WAMU= cut div., 3k layoffs, need to raise 2.5 billion
    INDYMAC = rated to junk
    MER and Morgan = 2008 recession likely
    B of A = freezes money market account

    Sleep tight boys and girls, the FED is going to cut tomorrow and everything will be ok!

  53. 53
    disbelief says:

    over 15 pages of homes to chose from under Seattle on Craigslist for today. That’s 1500+ houses (save for a few lots). I’m pretty sure that’s unprecedented. This is compared to avg. three or four pages for this past spring/summer! Guess that’s what they call a “buyers market”.Many sound desperate too – Lot’s of folks hurtin’ bout now.

  54. 54
    Eleua says:

    To anyone who thinks WM is going to be a screaming buy in a year or two…

    Ask yourself what WM’s balance sheet is going to look like with its secondary and tertiary portfolios trading at 10cents on the dollar.

    I doubt they would survive trading at 5X that value.

    Today’s news was as predictable as the sunrise. Anyone who got taken by surprise needs to pay closer attention.

    So, how does anyone think WFC is going to shake out?

  55. 55
    synthetik says:

    Brian,

    This isn’t pessimism on display here – it’s reality.

    Also, if you have PUTs on WM you can only be optimistic! :)

    As far as WFC, my prediction is the same as it was for WM over a year ago.

    KA-BOOOM!

  56. 56

    I take one travel day and when I turn on KIRO in the airport parking garage, I hear the WaMu news at the top of the hour.

    Q: How much are my deposits insured up to?

    Q: Who has a recommendation for me on a second bank?
    Thanks, guys.

  57. 57
    deejayoh says:

    AndyMiami, WaMu is much bigger, with a much broader asset base, than Bank of Boston was in 1990

    I posted this in the forums, but I guess it bears repeating…

    WaMu distribution of “loans held for portfolio”

    California = 49%
    NY/NJ = 13%
    Florida = 8%
    WA/OR = 6%
    Texas = 3%
    Illinois = 3%

    Broad, yes. Good, no.

  58. 58
    bitterowner says:

    Jillayne,
    Bank of Mattress is looking good right about now.

  59. 59
    what goes up comes down says:

    I couldn’t help responding to a real estate agents craiglisting because of her — buy now tag line:

    “Subject: $899000 ** Beautiful Montlake Tudor ** 4 bedrooms

    “If not then off the market until springs traditionally sellers market with more buyers competing for homes. ”

    My two cents was:

    BETTER HOPE SO :-)

    She came back with the following:

    “Yes, I do and so do my sellers not to mention many others! ”

    Sometimes one cannot resist responding to some of the drivel that spews from RE agents.

  60. 60
    Buceri says:

    Does anyone else remember Cramer’s meltdown last summer? He put his head and arms down on the table, raised his head, looked at the camera and said in a soft voice, “I wish I could tell you to go out, buy WAMU and take the dividend”….

  61. 61
    Buceri says:

    BY THE NUMBERS

    49,748: Total number of WaMu employees on Sept. 30

    3,150: Approximate number of WaMu employees that will be laid off

    5,400: Number of WaMu employees in Seattle

    380: Number of those that will be laid off

    $19.88: WaMu stock’s closing price Monday

    $44.41: WaMu stock’s price six months ago

    FROM: P-I reporter Bill Virgin.

  62. 62
    what goes up comes down says:

    I wonder if the WAMU bonuses will help people buy now and keep the RE market going.

  63. 63
  64. 64
  65. 65
    The Canary says:

    Just want to comment to Andy Miami, some good points, but, don’t get too caught up on the payment with credit cards. My monthly goal is to spend no more than $100 in actual cash. Why? Everything that is not cash downloads into my Microsoft Money, gets categorized and analyzed against budget and spending trends. I have no credit card debt, balance are paid in full each month. But yes, I’ll buy a $2 item at a store and pay with a credit card.

  66. 66
    Angie says:

    Buried amidst all the highfalutin’ discussion of the finance world was this little unintentional crack in the bubble bravado:

    My landlord works for WaMu. Fortunately, not in their home loans division, but still… *paranoid*

    No ill will intended for Lake Hills Renter or his landlord, of course. Just pointing out that one of the downsides of renting (your living situation is at your landlord’s mercy) may also be magnified as that sweet, sweet schadenfreude comes to full flower.

    Those of you who’ve enjoyed crowing about how your rent is lower than your landlord’s mortgage payment may want to keep your eye out for your next place…

  67. 67
    what goes up comes down says:

    Angie, what is your point I am sure you have one, oh, a renter should be worried they might have to move? I would rather move to another rental in this environment than be FORECLOSED on. What are you using your head for — a hat rack.

  68. 68
    David McManus says:

    What really bothers me are those commercials where everyone looks rudely at an individual who decides to pay by cash (I think Visa?) I think I want to make a commercial featuring the couple from the Suzanne / Century 21 commercial that shows him digging through trash cans, sobbing, while his wife goes into the store with Suzanne clutching her Prada bag (paid for on credit, of course). As she tries to swipe her card, it keeps coming up “denied. denied. denied.” Pan to Suzanne who is now chatting with another person in line trying to drum up some new business. “Oh, the market’s just fine. It’s never been a better time to buy. Here’s my card.”

    And on, and on, and on…..

  69. 69
    Brian says:

    DJO, loans are only part of WaMu’s asset base. Is the picture gloomy, yes. Is it fatal, I don’t think so, but I suppose you never know.

    With regards to banking, keep up with the free checking that any major bank offers, but go with an on-line savings account to maximize your yield (I get 5.05% on my money which isn’t terrible considering the state of the overall market).

    With regards to paying for things with cash, I think that is a total waste. If you are responsible with your budget (responsible means – you spend within your means and continue to save at a high rate – my wife and I save 60% of our net take home), all of your spending should be on a points card that you don’t have to pay for. Every year we get a free flight to Europe with points through our spending. It’s not for everyone, but if you’re responsible with your money and you like to travel, miles really pay off.

  70. 70
    deejayoh says:

    DJO, loans are only part of WaMu’s asset base. Is the picture gloomy, yes. Is it fatal, I don’t think so, but I suppose you never know.

    I don’t know that it’s fatal either – but Portfolio Loans are 2/3’s of WaMu’s ~$330B asset base – so I do think it a bit gloomy. I don’t expect this to be the last of the write-offs.

  71. 71
    David McManus says:

    I consider people that pay off their cc balance in FULL every month, myself included, as paying cash. Yeah, yeah, yeah, I know I’m getting a month from the cc company (Amex), but as Brian said, I’m getting the points that I’ll never be able to use. On my Amex, I just get actual money back instead of trying to get a free flight. Isn’t it silly to pay a membership fee of $100-$200 per year for a free flight, however, I see lots of ff credit cards that do this.

    As a social experiment, I wonder what would happen if we selected 10 random people on the street and asked them to pull 10K out of the bank. How many would get ye old credit card for a cash advance rape, how many wouldn’t have it, or how many would just pull it right out of liquid savings (no retirement accounts)?

    There’s a lot of “house poor” people around here with LOTS of home equity / credit card debt and it really saddens me. Well, that part is a lie, but it is sad.

  72. 72
    NotaBull says:

    “Every year we get a free flight to Europe with points through our spending. It’s not for everyone, but if you’re responsible with your money and you like to travel, miles really pay off.”

    Same here. We’ve been saving for a few years now, and almost have enough miles for two business class return flights to Italy on British Airways. That’s about $6000 of flights! I never have a revolving balance on the card, and reluctantly pay the annual fee because I know the flight value is massively outweighing the fee I’m being charged.

  73. 73
    NotaBull says:

    “Isn’t it silly to pay a membership fee of $100-$200 per year for a free flight, however, I see lots of ff credit cards that do this.”

    Yes, that would be silly. However, you’re incorrect regarding the value of the cards and the fees. I’ve paid about $250 in fees in total in this card over 3 or 4 years (I think it’s $70 a year). Right now I can get 3 regular returns to London (about $3000 in value) or if I save more miles I’ll have about $6000 in business class flights. There is simply no other way I would fly business class – I’d probably throw up if I ever spent that much on a flight, in real money.

  74. 74
    Brian says:

    With regards to fees credit cards charge, my wife and I have spent exactly $0 on fees the last several years. We trade off who has the card and receive 20,000 miles every time we sign up for a card. Because we are only applying for credit once every 2 years and because we never run a balance and always pay our bill in full, our credit is prestine. We are going to Europe business class all thanks to miles (the tickets would cost $10,000 a pop otherwise or $20,000 total for the math challenged =)).

  75. 75
    David McManus says:

    I should have clarified. I was mainly focusing on the Alaska Airlines card that they pimp every time I fly them.

  76. 76
    Lake Hills Renter says:

    With all due respect, Angie, I was being facetious. If I have to move becuase of WaMu fallout, then that’s just fine. Thanks to my living situation in the last few years, I am now quite comfortable financially. Moving is far from the end of the world.

  77. 77
    Lake Hills Renter says:

    PS. In fact, I’ve already been seriously considering moving because of several rowdy/loud neighbors down the street. Ah, the freedom of renting. ;)

  78. 78
    The Tim says:

    No, see LHR, you’ve got it backward. If you lived in a neighborhood full of owners, you wouldn’t have a problem with rowdy neighbors. Because each and every homeowner is a model citizen that spends all of their free time working to better society. You wouldn’t want to move away, because you would all be so joyously content, with your perfectly trim green lawns, your white picket fences, and your pretty pretty pink ponies.

  79. 79
    Affluent Bitter Renter says:

    “No ill will intended for Lake Hills Renter or his landlord, of course. Just pointing out that one of the downsides of renting (your living situation is at your landlord’s mercy) may also be magnified as that sweet, sweet schadenfreude comes to full flower.

    Those of you who’ve enjoyed crowing about how your rent is lower than your landlord’s mortgage payment may want to keep your eye out for your next place…”

    So the landlord will respond to the loss of his job by raising the rent on his rental above the market rate? That’ll work – then he can have no job, and no tenant.

  80. 80
    David McManus says:

    Sure, Tim. That’s why I live in and they have Nazi-HOAs.

  81. 81
    WestSideBilly says:

    second question; I have a credit card balance with WaMu. If WaMu goes poof does that balance get transfered elsewhere?

    Not sure if this got answered, but if WaMu went under, the bankruptcy court would auction of WaMu’s assets, one of which is any credit card debt. An investment/capital company would buy the debt for 50 cents on the dollar and collect the outstanding debt. So your accounts won’t go poof; you’ll just send your monthly payment to a new address. No free lunch for the little guys.

  82. 82
    NotaBull says:

    “So the landlord will respond to the loss of his job by raising the rent on his rental above the market rate? That’ll work – then he can have no job, and no tenant.”

    Well, my ex-landlord lost his job, fell onto hard times and didn’t renew my lease on my rental because they had to move back into it. They’re still trying to sell the “dream house” now…

    Sad/amusing quote from 7 year old as she toured the house for the first time in her living memory: “Mommy, where are the stairs?”, Mother: “No, child-of-mine, this is *all* of the house”.

  83. 83
  84. 84
    TJ_98370 says:

    For what it’s worth – I have several CD’s at Countrywide Bank, which is seperate from the home loan mortgage part of the company, and I’m getting 4.7% to 5.15% on 1 year CD’s.

  85. 85
    uptown says:

    For those with a short memory – WaMu layed off 10,000 last year as the first step of closing down that toxic loan company (based in CA) they bought a few years ago.

    There are 1,400 job openings listed their website today. This is not a small company.

  86. 86
    Lake Hills Renter says:

    re: landlord: the reason I would possibly have to move if my WaMu landlord got laid off is that he has a 30yr/fixed on the place I’m renting, and the new fancy place he has on Mercer has an ARM, not to mention a bit of stretch for his finances I’d imagine (non-working wife, 2 kids). If he had to lose one of the houses, it would more than likely be his current one, which would only leave him the one I’m in.

    re: owner v renter: There are a few houses in my neighborhood that are renters, including mine of course. For what it’s worth, my yard is maintained better that most of the owners, and I’m much quieter than most of the owners. I’ve met all of my immediate neighbors,a nd we all get along well. I get invited to holiday parties, and left Christmas cookies, as if I were one of their own. In fact, during last year’s power outage, it was us renters that were out with the chainsaw clearing the road when the power company wouldn’t. Some of the other renters down the block exude more stereotypical renter behavior, but that’s to be expected from college students.

    The aspiring bass player that graces us with his practice sessions from half a block away several nights a week is, and is my main reason for considering moving, is an owner from what I’ve heard.

  87. 87
    biliruben says:

    I diversified, and got out of my broker MM, buying a 8 mo CD and WAMU at 5.4% a few months ago.

    For what it’s worth, I’m not worried.

  88. 88
    SunTzu says:

    What?? Only 3,150 !!?? WM needs to show at least 10,000 people out of its door. The bank is bloated with morons, dead weights and non-performing employees.

    Why cut the fricking dividend when you could have laid-off more people and use that money to pay slightly more dividend? That Killinger guy will be out of a job soon…..

    WM won’t go bankrupt some other bank will pick it up for cheap……

  89. 89
    David McManus says:

    Guess the market didn’t like Bernake’s quarter point rate cut. It was up 30 prior to the announcement, now down 130 and dropping.

  90. 90
    Lake Hills Renter says:

    Down 193 by my ticker (20 min delay).

  91. 91
    David McManus says:

    From briefing.com:

    The initial reaction to the FOMC decision was decidedly negative. The 25 basis point cut on the fed funds rate was expected, but there was increased chatter that the Fed would be inclined to cut the discount rate by 50 basis points to 4.50% to address some of the liquidity strains weighing on the financial markets.

    The agressive discount rate cut didn’t happen, which provided the first source of disappointment.

    Strikingly, the Fed’s directive no longer references the thinking that the upside risks to inflation rougly balance the downside risks to growth. On the contrary, while the statement did note elevated energy and commodity prices may put upward pressure on inflation, the bulk of the statement seemed to revolve around slower economic growth.

    The Fed acknowledged an intensification of the housing correction, some softening in business and consumer spending, and strains in financial markets. It also said recent developments have increased the uncertainty surrounding the outlook for economic growth and inflation. In light of the emphasis on growth factors, the initial response from the stock market is likely rooted in a sense of disappointment the FOMC didn’t take a more aggressive stance at this meeting.

    DJ30 -180.95 NASDAQ -31.99 SP500 -21.77 NASDAQ Dec/Adv/Vol 1712/122/1.17 bln NYSE Dec/Adv/Vol 1437/1685/711 mln

  92. 92
    patient says:

    I watched cnbc at lunch and it’s sad to the extent of being comical how the same people that failed to see or refused to acknowledge the detremental credit bubble for years is now up in arms over what they claim to be the fed’s blindness to what is going on and the required actions.

  93. 93
    Angie says:

    I would rather move to another rental in this environment than be FORECLOSED on.

    This may surprise you, but those are not the only two options.

    Well, my ex-landlord lost his job, fell onto hard times and didn’t renew my lease on my rental because they had to move back into it

    Yep. If the numbers don’t work out and your landlord has to move back in, or sells out from under you, or the property forecloses, or gets converted to a grow house to sustain cash flow, or bulldozed to build a pink pony farm—whatever—the choice is not yours about whether you stay or go.

    There may also be a teensy bit more competition soon for rental places, what with all the people who are losing their houses scrambling for new digs as well.

  94. 94
    Bellevue Ave says:

    angie, there might be more competition for rents but there might also be more rentals as people stop trying to sell.

  95. 95
    Angie says:

    Let me refer you back to the last 2 years of posts about costing more to own than rent, etc, etc. If, as is so fervently hoped, all those no-good landlords would lose their shirts by renting and instead are reduced to (love this phrase) “jingle mail” their keys in to the bank, who’s going to be renting out those houses, again?

  96. 96
    Angie says:

    Also–I was just joking about the grow houses, and then over on the other thread y’all are talking about drug dealers and grow houses. Coincidence?? Must be something in the air, so to speak.

  97. 97
    John says:

    The new scare tactic from realtors: Your landlord is losing his ass in this market and he may go bankrupt and kick you out. Buy now, the hot potato is yours!

    Sorry, with tens of thousands of savings gained from renting, people can afford to move if it comes to that. They may end up paying less rent with new listings flooding the market.

  98. 98
    rose-colored-coolaid says:

    “Angie – Let me refer you back to the last 2 years of posts about costing more to own than rent, etc, etc. If, as is so fervently hoped, all those no-good landlords would lose their shirts by renting and instead are reduced to (love this phrase) “jingle mail” their keys in to the bank, who’s going to be renting out those houses, again?”

    Huh!?!

    All homes (and condos and town houses) are either occupied or unoccupied. An unoccupied house is always losing someone money (but not the state because they still collect taxes). The owner has three choices : sit on it (second homes?), rent it, or sell it (FORECLOSURES).

    So, home X is cash-flow negative. It was bought in June 2007, and the owner jingle mails it in. That house doesn’t go away, either someone buys it to live in it, to rent it, or flip it (ye-gads!). In short, the next owner will probably be renting the house out again…or they’ll sell their last house, which now becomes a rental. Simple, no?

    You seem really angry at renters Angie. Did some next-door renters play Stairway to Heaven really loud 30,000 times when you were a kid, and ruin the song for you?

  99. 99
    NotaBull says:

    “The new scare tactic from realtors: Your landlord is losing his ass in this market and he may go bankrupt and kick you out. Buy now, the hot potato is yours!”

    Not everything that you don’t like to read is some “scare tactic”. I’m sitting here in a rental sitting on a pile of cash watching prices go down, and I actually DID get kicked out (i.e. lease not renewed) because the landlord overstretched.

    This is not to say that the amount of rentals will decrease. Ultimately, it’s likely to INCREASE, but there will still be situations in which some over leveraged landlord will have to move back to the “little house”. It happened to me. It’s a true story. It will happen again to someone else. It will happen more often as temporary landlords stop being landlords.

  100. 100
    EconE says:

    If the Landlord has to move back into the “Little House” then what happens to the “Big House”? Is that what all those yummy high end rentals are?

    It sure sounds like a scare tactic to me.

  101. 101
    NotaBull says:

    “If the Landlord has to move back into the “Little House” then what happens to the “Big House”? Is that what all those yummy high end rentals are?

    It sure sounds like a scare tactic to me.”

    It’s only a scare tactic, if you assume it is. Ultimately, the “big house” is on the market pushing all prices down. They still haven’t sold it.

    The point is NOT that this kind of situation is supposed to make you go out and buy a house. The point is that this situation happens, and it’s going to happen more often in Seattle as prices continue to decline.

    So if you’re looking for a rental, my advice is:

    -Rent a house from some old granny that’s owned the house for years and is cash-flow positive.
    -Get a long lease and be OK with sticking with it.
    -Don’t unpack too much.
    -Move into an apartment or townhouse that is owned by larger investors – i.e. not SFH owned by a small-time speculator.

    Personally, I’m renting from a school that owns a bunch of houses and has done forever. No mortgage. In addition, I haven’t unpacked everything. :)

  102. 102
    wageslave says:

    Nowhere did I read that Angie said being kicked out of your rental is equivalent to foreclosure. Did anyone else and I missed it? I could be wrong, but I believe the point was that just because you are renting does not guarantee you’ll be untouched.

    For example, if I had was renting a house and had a wife, 2 kids in public school and a dog and was given very limited time to move out of the blue, that’d be a serious pain in the ass, not to mention potential hardship on my kids. Not fun. But, yes, more “fun” than foreclosure…. Even if I was single and renting, being forced to move would suck because I hate moving and also a potentially unexpected expense that depending on my income could take a real bite out of finances for the month.

  103. 103
    Angie says:

    Wageslave says, Nowhere did I read that Angie said being kicked out of your rental is equivalent to foreclosure. Did anyone else and I missed it? I could be wrong, but I believe the point was that just because you are renting does not guarantee you’ll be untouched.

    Hey! It’s nice to see someone on this blog with actual reading comprehension skills!

    Notabull says,The point is NOT that this kind of situation is supposed to make you go out and buy a house. The point is that this situation happens, and it’s going to happen more often in Seattle as prices continue to decline.

    Bingo. I will also go so far as to suggest that the people who’ve been marveling about their screaming deals at their landlord’s expense are likely to be affected in the near future as all this monkey business shakes out. Sooner on average, anyway, than those who’ll be dumped when that kind old granny kicks the bucket and her heirs sell the property to split the estate.

    Wageslave again, For example, if I had was renting a house and had a wife, 2 kids in public school and a dog and was given very limited time to move out of the blue, that’d be a serious pain in the ass, not to mention potential hardship on my kids. Not fun. But, yes, more “fun” than foreclosure.

    I just watched friends go through this, minus the dog. For reasons still unclear, the property managers showed up with minimal notice, trumped up charges that they were violating their lease, and started making like they were going to evict. Six weeks after the kids had started a new school year and they basically had 30 days to figure out what to do. Probably not on par with foreclosure but certainly a big, fat, stressful, expensive, miserable upheaval, not at all trivial.

  104. 104
    bitterowner says:

    Re: “Don’t unpack too much”

    I also wouldn’t bother to unpack too much if I overextended myself on a suicide loan to get into that “dream house” in order to give my kids a ’stable’ environment.

    give me a break.

  105. 105
    Angie says:

    Rosie, of course, merits his own reply:

    So, home X is cash-flow negative. It was bought in June 2007, and the owner jingle mails it in. That house doesn’t go away, either someone buys it to live in it, to rent it, or flip it (ye-gads!). In short, the next owner will probably be renting the house out again…or they’ll sell their last house, which now becomes a rental. Simple, no?

    I don’t think it is that simple, actually. What proportion of recently-sold homes are immediately put on the rental market?

    You seem really angry at renters Angie. Did some next-door renters play Stairway to Heaven really loud 30,000 times when you were a kid, and ruin the song for you?

    No, but I was alarmed by all those bustles in my hedgerow.

    It’s just too fun to see it dawn on the assembled that sauce for the owners can end up being sauce for the renters, too.

  106. 106
    johnnybigspenda says:

    I don’t completely understand what is so bad about renting out a place in a ‘negative cash flow situtation’. Someone is still paying 80-90% of your mortgage. A couple hundred a month of negative cashflow shouldn’t put most people under… cut out your starbucks if you have to.

    Sure, opportunity cost says your downpayment and any existing equity could be used for better ‘investments’, but on the otherhand, after 5-10 years max, rents are most likely going to be substantially higher which should put you cashflow positive.

    The market will come back someday. In the mean time, you may have even built up some equity on someone else’s dime…

    Let it ride.

  107. 107
    John says:

    Angie, either a lot of homes will be foreclosed and many renters get kicked out – housing market here crashes, or there won’t be that many homes foreclosed and most renters aren’t affected – housing market won’t be that bad. Make up your mind.

  108. 108
    christiangustafson says:

    $2B+ of non-existent GAAP income from option ARMs booked over the past two years.

    I bet these fail in excess of 90%. The pay-option ARM is a true suicide loan. No one can survive the adjustment and re-amortization of these things.

    WaMu will not exist in 2010. I rode WaMu from 40 into the 20s, and then from 32.5 to 17.5. If it heads up to 20 again I’ll back up the truck on mid-term puts.

  109. 109
    bitterowner says:

    re: “I don’t completely understand what is so bad about renting out a place in a ‘negative cash flow situtation’. Someone is still paying 80-90% of your mortgage. A couple hundred a month of negative cashflow shouldn’t put most people under… cut out your starbucks if you have to. ”

    I’m guessing you’ve got this part figured out already, but to be completely obvious – 80-90% is okay. As you say, seems like a dumb investment strategy but if you’re already holding the bag and can sustain your costs it won’t ruin you and might work out fine in the long run. However, if you just bought, chances are that only about 40-50% of PITI plus standard maintenance costs will be covered, if that. Add additional unforeseen and potentially large maintenance expenses and the likelihood of at least a few significant periods of vacancies (how much does 3-4 months of vacancy, say, every 3 years cut into this 40-50%) and the situation isn’t quite so rosy. Add the possibility that you overextended and bought with a suicide loan with the ‘knowledge’ that you could refinance with those massive equity gains (or that you have tapped much equity in the recent past and have been doing so regularly to support your existence) and that you don’t fit the narrow rate freeze criteria in the current bail out and, well…tick tock, tick tock. It’s easy to give up your Starbucks. It’s harder to give up your meals, your kids’ shoes, their education, …..

    If you are independently wealthy and were just hoping to pad your billions with some real estate $$ then it’ll just be a lesson in economics and manias and it’s simply off to the club with ma-Ma and pa-Pa to drink away the blues and adjust your portfolio and plan your tax strategy. If you were betting your livelihood and or retirement on continued appreciation, and it appears from recent behavior that many were, Starbucks isn’t all that people will have to give up. Perhaps Starbucks will be kind enough to fund some soup kitchens (complete with Starbucks icon advertising) or supply free coffee to shelters to win back their customer base.

  110. 110
    notabull says:

    “I also wouldn’t bother to unpack too much if I overextended myself on a suicide loan to get into that “dream house” in order to give my kids a ’stable’ environment.

    give me a break.”

    I’m not sure what your point is, although it does seem like you think I’m saying “go buy a house”. Read my posts and you’ll see I’m not. I guess in response, I would tell you not to over-extend yourself on a suicide loan to get into that “dream house”. But just because you won’t/haven’t done so, doesn’t mean that others didn’t.

    I’m really not sure why so many on this board talk about the rampant speculation, bad financing, impending foreclosures, and then pretend like it won’t affect renters too when these “investors” need to sell the house or move back into it. It won’t break the renter’s bank accounts by any means, but it’s a hassle. I know because it happened to ME and it’s happened to others too.

    Face it, renting *is* less stable than buying a house, with the caveat that you must be financially prudent when you buy (timing, loan, etc). Obviously, this doesn’t apply to a lot of people these days, but that doesn’t mean it’s not true. BTW, I rent right now, but have owned in the past.

  111. 111
    bitterowner says:

    “I’m not sure what your point is, although it does seem like you think I’m saying “go buy a house”. Read my posts and you’ll see I’m not. I guess in response, I would tell you not to over-extend yourself on a suicide loan to get into that “dream house”.”

    NaB: we are on the same page. My point was simply that being forced to move is not simply the purview of renters in the current environment and it seemed, at least, that the other side of the argument wasn’t getting much airtime. I realize from your past posts (and name) that you are not pumping real estate.

  112. 112
    deejayoh says:

    just heard that a friend of mine was escorted out by security guards this AM. he was an exec in their retail mortgage business. Merry xmas.

  113. 113
    what goes up comes down says:

    I am amazed sometimes when the simple logic of something blows right by people.

    To follow the old KISS principle, I think it is obvious to the most casual observer that renting now versus buying is the way to go.

    This silly idea that a renter might have to move because the landlord needs to move back into the house makes me ask the simple question: would you rather be the owner in that case or the renter? If the owner MUST move back in I am sure it IS NOT by choice, i.e. they are taking it in the shorts someway because their INVESTMENT model IS NOT working.

    As for getting kicked out on short notice has anyone heard of that thing called a LEASE. It is a contract. If you don’t follow it of course the owner can kick you out but if you do I am not sure someone who MUST move back in wants to go to court and drop some cash in that process to try and force someone out.

    I am surprised Angie hasn’t said to go out and buy — yet.

  114. 114
    John says:

    what goes up comes down, exactly. The bulls make it seem like renting is unstable. Well, owning a home is not stable either if most of your paycheck goes to the overpriced house and you are left with little savings.

  115. 115
    Jackson Wallace says:

    I know someone who inherited credit card debt of 15k in a credit company that got bought out. Some meager attempts were made to establish contact with the estate, but they gave up pretty quickly. I also knew an ex-con who bought a new Ranger, made 1-2 payments, got it repo’D, then two years later, bought an Explorer, made no payments and then died. Lovely story, I know. I heard his family has played this game with cars as well. No wonder the financial system is creaking.

  116. 116
    Notorious says:

    I wonder how long before the board shows Kerry Killinger the door

  117. 117
    notabull says:

    “what goes up comes down, exactly. The bulls make it seem like renting is unstable. Well, owning a home is not stable either if most of your paycheck goes to the overpriced house and you are left with little savings.”

    Then, uhhh, don’t send most of your paycheck to an overpriced home so that you can’t save any money!

    If, however, you:

    -Wait for a time when home prices are more reasonable and not likely to drop to a significant degree (i.e. not right now)
    -Have a solid down payment that will provide a buffer should you *need* to sell for whatever reason
    -Have adequate cash reserves in case of job loss, etc
    -Have reasonable DTI ratios on your mortgage and associated costs of ownership

    If you do all these things, owning a house *is* more stable than renting. Is renting UNstable? No! You do realize that’s possible for X to be more stable than Y, without Y being unstable, right? This is not a binary debate.

    If you can check off all the boxes above, you have less chance of having to move than when you’re renting. This whole argument and whining about “renting isn’t unstable!!” and “these housing bulls blah blah blah” just completely misses the point.

    I just moved in April because of the stupid over-leveraged landlord. It cost me a big of money, I was really annoyed, but I got over it. I’d have been more pissed off if I *purchased* a house a year ago, that’s for sure…

  118. 118
    TJ_98370 says:

    DJO said:
    .
    just heard that a friend of mine was escorted out by security guards this AM. he was an exec in their retail mortgage business.
    .
    Wow! Any details?
    .
    And what kind of friends do you have anyway? I thought you were a respectable person. I didn’t know you hung out with mortgage brokers.

  119. 119
    David McManus says:

    And it keeps going down…..down…..down…..

    Link

    At least we’ve still got Boeing and MSFT ;-)

  120. 120
    s.data says:

    I can’t believe I’m defending WM but here goes…

    Dear deejayoh,

    What exactly is a Retail Mortgage Business?

    Secondly, people were layed off and given decent packages. There would be no justification or explanation for an employee (outside of technology specific postions) to be escorted from the building.

    Thirdly, an exec (whatever that means) would certainly not experience the situation you’ve invented here.

    I call bullshit on you and your post.

  121. 121
    Angie says:

    DJO, sorry to hear about your friend. Merry Christmas indeed. I hope he/she at least gets a decent severance package.

    This silly idea that a renter might have to move because the landlord needs to move back into the house makes me ask the simple question: would you rather be the owner in that case or the renter? If the owner MUST move back in I am sure it IS NOT by choice, i.e. they are taking it in the shorts someway because their INVESTMENT model IS NOT working.

    I’ve thought about this scenario in our case. Things would have to get FUBAR in order for us to need to take this fallback position, but in fact, it’s really very reassuring to know it’s there if we did need it. We’d still have a roof over our heads, the mortgage payment would be much lower than the one for our current residence (and could be quite a bit lower yet if we could refinance the remainder of the principal out to 30 years, instead of the last 10 of a 15 year mortgage). And a big chunk of the mortgage principal would have been paid down during the years we’d rented it.

    It would certainly suck if our finances took such a nosedive that this is how things turned out, but in the grand scheme of things, there are way worse outcomes. We wouldn’t be living out of our car or crashing with my in-laws, for instance.

    If you don’t follow it of course the owner can kick you out but if you do I am not sure someone who MUST move back in wants to go to court and drop some cash in that process to try and force someone out.

    If you have a month-to-month, the landlord is only required to give you 20 days’ notice. If you have a lease, the landlord does need to get a court order to evict, but housing for the owner’s family members is considered one of the “just causes”, see the info here:

    http://www.tenantsunion.org/rights/27/just-cause-eviction-ordinance

    Renters are often required to give references of prior landlords when seeking new rentals. I gather in practice that most of the time when a LL says, “you need to move out because I need to move back in”, most tenants choose not to make their LLs jump through the hoops to get a court order.

  122. 122
    DDX12000 says:

    Deejayoh, I definitely call horseshite on your WAMU post – no one was given notice at WAMU about being laid off until the afternoon of the 10th, specifically 2:30 and after. So, your mythical ‘exec’ buddy wouldn’t have been escorted out by security guards during AM hours. Also, if this friend of yours was an exec, he would have known what was coming.

    How do I know you are full of it? I have plenty of friends that were impacted by the layoffs, some were whacked and some did the whacking and security wasn’t involved at all. Those being let go were called into a conference room and asked to turn in their card keys, sign the termination paperwork, and given a short presentation from an HR rep about job placement assistance.

    If your ‘exec’ buddy in ‘retail mortgage’ was escorted out that morning, a dubious claim at best, it was because he knew he was getting whacked that day and started acting up or you made up the story. I’m leaning toward the latter.

  123. 123
    TJ_98370 says:

    just heard that a friend of mine was escorted out by security guards this AM. he was an exec in their retail mortgage business.

    Maybe it’s just me, but did DJO actually say his friend worked for WaMu? I’ll admit that it could be interpreted that way, given that his terse post is on this particular WaMu oriented thread.

  124. 124
    deejayoh says:

    DDX12000 –
    My info was 2nd hand, from a mutual friend – so I may have had the details wrong – but your story of the quick termination is consistent in terms of the timing. I guess it’s a marginally better experience – but the point was that people were let go immediately.

    As to you using your one post on this site to basically call me a liar… thanks for the contribution

  125. 125
    deejayoh says:

    I guess I missed s.data’s post too. Obviously I got the details wrong – except for the being let go part. I haven’t caught up with him yet. Ever play the game of telephone?

    Sorry to touch a nerve – pretty obvious you work there.

  126. 126
    TJ_98370 says:

    Okay –
    I believe it would be correct to interpret the last few post’s to mean that things are a bit tense at WaMu and DJO’s friend did indeed work at WaMu.

  127. 127
    patient says:

    I work for a company that was forced to reduce the staff with several thousands a ~60% cut at the dot com bust. However much I would like for home prices to become sane again I don’t wish termination on anyone or any company. It’s a tragedy and I feel for the WaMu staff, yes even the ones that pushed bad loans.

  128. 128
    Notorious says:

    patient,

    That’s why Killinger needs go! WAMU got in over it’s head during his watch. Now, the mess is out in the open and there is no more hidding.

    A lot of people will be affected by Killinger’s bad judgement calls. While people are shown the door for the holidays. Killinger will collect millions in cash and stock incentives.

  129. 129
  130. 130

    […] that just last December they also chopped 3,000 positions, mostly from their home-loan […]

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