Jul
14
WaMu (WM): Epic Fail
Filed Under Banks, Markets, Real Estate | 1 Comment
The markets have lost almost all confidence in Washington Mutual and their exposure to residential mortgages (nearly $300B worth).
The stock is now trading at $3.6B market cap, or about 16% price-to-book.
Chances are, investors got it right. While the writedowns may be slow to come for WaMu, they will definitely have to mark assets down billions upon billions of dollars as delinquencies and foreclosures mount.
Shareholders were recently diluted when TPG acquired a preferred ownership stake at $8-$9.
Will the Fed, or possibly another bank, step in and take over the ailing firm’s balance sheet?
Jul
11
Crude Bulls Skip Sleep; Fannie/Freddie Testing The Extent Of Their Solvency
Filed Under Markets, Oil, Real Estate | 2 Comments
After a late day rally in the crude futures markets on Thursday, the bulls pumped the price of oil up nearly another $5 overnight, to $146.xx.
Fannie Mae and Freddie Mac are down nearly 50% overnight, valuing the equity in the firms near $5B on TRILLIONS of dollars of assets. The implicit guarantee from the American taxpayer may soon turn explicit, as capital injections will become necessary in the near future. There is no doubt about it; the American taxpayer and the Dollar’s strength are on the hook.
And the trading day is only beginning…