WAMU now one level above junk
Fitch just downgraded WAMU's "long-term benchmark issuer default rating" to BBB. According to their web site, that's one level above "speculative" - aka "junk".
Obviously the ratings agency model is fatally flawed - but I don't think this is an insignificant event. WAMU's survival is increasingly doubtful, it seems - though many of you had probably already reached that conclusion
Obviously the ratings agency model is fatally flawed - but I don't think this is an insignificant event. WAMU's survival is increasingly doubtful, it seems - though many of you had probably already reached that conclusion
Comments
Buy! Buy! Buy!
http://www.minyanville.com/articles/GOO ... ex/a/16242
You know that chart about boom/bust psychology? I'm just curious phase it is when people become delusional. What's next?
tomorrow's headlines
-Buffett planning on paying off back payments on underwater mortgages!
-President signs bill disallowing foreign lenders from collecting payments!
-Santa Claus and Easter Bunny team up to give every home a plasma TV and year supply of chocolate...consumer moral at an all time high!
I'm a contrarian too. I think they're insolvent or close to it, but I'm worried that short positions will be subject to massive short squeezes and buyout rumors. Plus there's just not much meat left on this bone.
The way I see it, even if you back out the home loan unit (which is what has caused them the most problems) the market value is still about $6B below book. I just don't see a lot of long-term downside risk. And if they drop below $10, I'd probably buy more. Its getting harder and harder to suppress the contrarian in me.
Look at XLF, which is lender index, and you'll see a really ugly trend line still. Which suggests it is still falling. That said, nothing can fall forever and I think anyone who believes the banks will 'never recover' is a fool.
You just might be jumping the gun a little bit getting in today.
6 months sounds like a plan, check back with me then.
http://seattletimes.nwsource.com/html/b ... amu14.html
Keep in mind, assets tend to appreciate over a long period of time, but they tend to crash very quickly and suddenly. I have no problem imagining any bank losing 60% of its value next week if the wrong kind of news is released. But I don't see any of them gaining 60% next week no matter how grand the news.
Can you say "BANK RUN"? Look what happened to BSC today. That could happen to anyone. There is absolutely 0 transparency in the financial markets right now. We are MAYBE, MAYBE, at half of the writedowns we are going to get, and that is being optimistic.
There is so much downside risk right now its not even funny. The nations 5th largest broker just shit the bed today, there is plenty of "long term downside risk", aka more bank failures.
We are going to see plenty more write downs before this thing is over, stay patient and wait for the ride back up. Its better to "buy high, sell higher" than to "buy high sell low."
Yeah...in autumn 2010.
And they continue to be in the crapper.
Down another 11% today.
How do you say it......woooo hoooooo?
In the commercials, they usually say it kind of like a scream that you don't really believe in.
WaMu denies regulatory move rumors as shares fall
The vultures are circling