THE POWER OF … huh?
In this episode I’ll be trying to say something sensible about a company I’d never heard of three weeks ago. Washington Mutual, now officially [1] "WaMu", is America’s sixth largest bank and the largest S&L to survive the epic 1980s S&L crisis. It would appear to be a major player among the private label lenders who took so much of Fannie’s and Freddie’s mortgage business once the bubble generated an abundance of sub-prime loans. Recently some funny stories started attaching themselves to the WaMu name (including the one about the name change). Eventually enough pieces fell in place to give a picture of a company in full panic mode. WaMu sees it’s in a trap (too much staff and too many exotic mortgages now that bubble business is shrinking and loan standards are tightening), and is trying escape by shedding big pieces of itself. Whether the result will be that of the European glass lizard shedding its tail, or more like a fox gnawing off its leg is not clear at this point. Either way, the spectacle should provide a good model for other private label lenders caught off-balance by the bubble burst. This week’s subtitle is a play on WaMu’s brand, "The Power of Yes!(TM)".[2] Here at Doom we’re pretty sensitive to things that just don’t make sense. We may not be able to solve the conundrums we find, but you always have the fun of watching us struggle.
