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?

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

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

“Little wonder with gains privatized and losses socialized that the enterprises [Fannie & Freddie] have gambled their way into financial catastrophe.” – Lawrence Summers, July 16, 2008.

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.

For those who missed it, US savings and loan bank giant Washington Mutual suffered badly on Thursday.

A slew of dire news pieces and downgrades sent the bank’s share price down more than 23.4 per cent, dragging virtually all US financials with it. In fact, leading to the biggest one-day rout in the sector since 2000.

…

The chief concern Friday is that WaMu will face a battery of collateral calls; downgraded, WaMu faces calls from its CDS counterparties.

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.

A battered Washington Mutual yesterday came out swinging, blasting an analyst who suggested there was a run on the bank and blaming two days’ worth of double-digit stock declines on Washington’s efforts to curb short sellers.