It’s Friday. Yesterday financials had their largest decline in eight years, tomorrow the Senate votes on the housing bill, and today we try and make sense of it all. Personally, I thought the most sensible thing I heard all week was Elizabeth McDonald of Fox Business quoting Ronald Reagan:
“In this present crisis, government is not the solution to our problem, government is the problem… It is no coincidence that our present troubles parallel and are proportionate to the intervention and intrusion in our lives that result from unnecessary and excessive growth of government.” – Ronald Reagan, Inaugural Address, January 20, 1981
Anything else make sense this week? Any new we should be aware of? Insights? Links?
This is an open thread- so let’s see what you’ve got.
Look, up in the sky (trailing smoke). It’s National Public Radio’s 88.5 FM News Service in Washington DC! nope. It’s the West African Monetary Union! uh uh. Well, then it’s Washington Mutual, America’s Largest surviving S&L!
There are multiple layers of confusion in the WaMu story, even before we get to the multiple layers of confusion. I think it’s the case that WaMu deals extensively with the Federal Home Loan Banks. The FHLBs are baby GSEs. Sort of like Fannie & Freddie, but merely gigantic, not humongous. Their regulator is FHFB, which is in the process of being combined with OFHEO within the GSE rescue bill that’s scheduled for Senate approval tomorrow. Which is to say that we are in a period of maximum confusion among the front-line regulators, just for starters.
I looked in The GSE Report but didn’t find anything recent that would throw light on WaMu’s situation vs the FHLBs.
Perhaps yesterday’s panicking financials can be partly blamed on the ridiculous name (Gimme Credit) for the analysis firm that suggested the beginnings of a trickling runnel at WaMu.
Another conspiracy theory is that the SEC’s move to protect 17 prime dealers and GSEs against short sellers unleashed the piranhas against depositories like WaMu.
Here are a couple of recent articles where I got some of the above. There’s lots more stuff out there. Heaven knows what’s going to happen today, but at least the financials are mostly up in aftermarket trading
“Banks WaMu’d”, by Sam Jones, FT / Alphaville blog, July 25, 2008.
and now for the screaming tabloid version …
“WAMU WHACKED: FHLB RUMOR RIPS STOCK; ANALYST’S REPORT FANS FLAMES”, by Mark DeCambre, New York Post, July 25, 2008.
Quote of the day (cited here earlier today by the WSJ):
man, when you’re sitting there nodding your head at something RONALD REAGAN said, you just can’t go any lower.
if I turn into a semi-Republican because of this whole thing, I’m going to throw-up.
my word – remorse. seriously? from who? none of the truly responsible that I can tell
Twist,
You’d be mighty proud of the lv RJ this morning. Front page of business section. Housing, Housing, Housing. No BS’rs allowed. Right to the point. Larry Murphy points out the median price for existing is 215k. If it would have increased only 5% over the last 5 years it would be 217k. Wow, that puts it in its proper perspective. We never really had a spike. It was just a facade. And nobody is saying we’ve hit bottom. Truth in journalism in the RJ this a.m. Now I’ll go read the rest of the paper
20th Shortjacker?
twist -
WaMu’s presently down just 2 cents, but what do you want to bet that if they or another depository gets in trouble today there is a sudden SEC announcement applying to them the short rule they put against the stocks of Fannie, Freddie and the seventeen Wall Street Investment Banks recently?