The Continuing Story Of...

[xthread]

Beyond the troubles at Countrywide, Bear Sterns, Fannie and Freddie Mac, Lehman, and AIG, a number of other institutions have been in a world of hurt as well.

Washington Mutual has a mortgage portfolio that has a lot of mortgages that are probably going to go bad. They've finally managed to persuade their primary investor that hanging on by themselves is unlikely to end well, and they're talking with BofA and Citibank about possibly buying WaMu.
Wachovia Bank has a rotting-mortgage-portfolio problem as well. Morgan Stanley also has some amount of mortgage-backed-security business that is probably in trouble, and while they're profitable, their numbers have been significantly underwhelming this quarter. They're now talking about merging, which would probably get both of them off the watch list of potential spectacular failure.

That looks to me like everything stabilizes, for a while, in the next few weeks. It'll take a little bit of time for those deals to get done, but it also looks like the rate of sub-prime mortgage collapse is starting to ebb, and foreclosure sales are actually getting done, so we could soon be on a road to improvement.

Until next summer, when the all of the people who have adjustable rate mortgages that they can't really afford at market rates start having trouble. But that's a good nine months away. And in the meantime, I really hope you don't work for a technology company whose primary clients are major banks and investment banking firms, because your sales are about to have a dismal day, unless you have some clever way to increase the recovery they make on the sale of foreclosed properties.

PS: It looks like Barclay's will pick up the bulk of Lehman for a song. Possibly a Beatles song, but still.

Comments

[deirdremoon.livejournal.com]

Noooooooo! Don't let Citibank buy WaMu! WaMu might not be the shining good guy that they used to be, but I have a close friend who went through three bank mergers in a row, eventually being eaten by Citi, and they were evil EVIL.

[ladykalessia.livejournal.com]

It's them, or I think Wells Fargo. Maybe BofA. Let me tell you, I am not thrilled with *any* of those options, least of all BofA...

If WaMu merges, all my real money is going into the credit union accounts. I pretty much only use my WaMu account as a convenient ATM funnel into there anyway...

[dixiemouse.livejournal.com]

Personally, I have had great experiences w/ Citi...

And BofA has the MOST lawsuits for fraud among other things, and that is from a lawyer that is adding on to his house thanks to just those lawsuits... (my recent experience with this involved my boss... he is still dealing with it, from March... )

[draggonlaady.livejournal.com]

It frightens me that BoA seems to be growing unstoppably. All of my experiences with them have been frustrating and plagued by confusion and incompetence. Sigh.

[julzerator.livejournal.com]

So, now I'm trying to figure out if I should move my checking and savings from WaMu to a local Credit Union. The whole bank merger thing scares me.

(And WaMu hasn't been so good lately, for some reason I really resented the fact that they changed my Debit card from Blue to Gold and from Visa to Mastercard. This happened a while ago but it still irks me)

[spaghettisquash.livejournal.com]

I wonder how many other people have recently been toying with the idea of withdrawing all of their savings.

[dixiemouse.livejournal.com]

I just had dinner w/ a friend that works for ING... they are not doing ANY more real estate loans until January. They are on a freeze. Which kinda screwed up some things that were in the pipes... but if that helps with the whole end of the world picture...