Get Out The Rain Gear
Couple of life jackets wouldn't hurt, either. TheStreet.com (09.10.07), via Bonddad:
"WaMu dropped 3% after CEO Kerry Killinger said at a Lehman Brothers conference in New York that the housing industry is headed for a 'near perfect storm.' He said the lender, which has already boosted its provision for loan losses this year, may have to sock away an added $500 million as housing markets continue to weaken." WaMu Chief Warns of 'Perfect Storm'Why is this a big deal? Bonddad explains (09.10.07) (link and bold in original):
"First, it's important to remember that Wamu is by far the biggest publicly traded S&L. It has a market capitalization of 30 billion. The next largest company by market cap is Sovereign Bancorp with a market cap of $8.4 billion. In other words, Washington Mutual is the big kid on the block by a fairly wide margin. Secondly, CEOs are well aware of their status. They know their words can move markets. As such, they are very good at being perma-bulls. No matter what the news, they usually try and spin it in a positive way. That's one of the reasons this statement is news. The CEO of the largest S&L in the US is saying housing is in really bad shape." "Housing Heading for a Near Perfect Storm"Note his graph depicting the monthly ARM resets for the next two years. Lots of fun to come, eh?
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