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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: patron_anejo_por_favor who wrote (145925)	9/12/2008 2:09:08 AM
From: Jim McMannis	Respond to of 306849

RE:"WaMu lured Fishman, 62, with a $7.5 million cash bonus and $1 million salary" How mant fingers does this guy have? They have time to sell branches? WaMu May Be Forced to Sell Deposits, Branches to Stay Afloat bloomberg.com Sept. 12 (Bloomberg) -- Washington Mutual Inc., facing up to $19 billion in bad home loans and slammed by a 34 percent drop in its stock this week, may sell parts of a nationwide 2,300-branch network to raise capital. The only real asset they have that's worth anything to other banks is the deposit base, because of their branches,'' said L. William Seidman, chairman of the Federal Deposit Insurance Corp. from 1985 to 1991. Seattle-based WaMu can probably sell branches in New York and Chicago, said Bert Ely, president of Ely & Co. Inc., a bank consulting firm based in Alexandria, Virginia. Alan Fishman, WaMu's new chief executive officer, may have to shed branches that hold $143 billion in deposits. The biggest U.S. savings and loan is headed for its fourth straight quarterly loss. Suitors have walked away because of potential damage to their earnings and WaMu's chief regulator, the Office of Thrift Supervision, has told it to boost risk management and compliance. On top of those challenges, Fitch Ratings yesterday cut its rating on WaMu debt to BBB1 from BBB, citing a lack of ``flexibility'' to add capital. Moody's Investors Service cut its long-term deposit and issuer ratings to Baa3 from Baa2 because of WaMu's ``reduced financial flexibility, deteriorating asset quality and expected franchise erosion.'' Moody's reduced the senior unsecured rating to below investment grade at Ba2. WaMu lured Fishman, 62, with a $7.5 million cash bonus and $1 million salary after his ousted predecessor, Kerry Killinger, failed to halt losses on home loans that already total $6.3 billion. The lender has estimated the sum could climb as high as $19 billion in the next 2-1/2 years, raising concern WaMu may need to raise cash for a second time this year. The company says more capital isn't necessary. `The Whole Chicken' Without most of its branches and deposits, WaMu would be limited to businesses that include credit cards and mortgages -- neither a guaranteed moneymaker in the current economic climate. WaMu's credit-card division had net revenue of $956 million in the quarter ended June 30, down from $1.2 billion the previous quarter. Commercial and home-loan units had a combined $351 million in revenue for the period, compared with $757 million. ``Who's going to take the assets? It's probably more valuable together than separated,'' said Gary Townsend, CEO at Hill-Townsend Capital in Chevy Chase, Maryland. ``It's like going to the supermarket, and anyway, the whole chicken is probably more valuable than the pieces.'' Other capital-raising options are limited because the market for preferred securities dried up since a government takeover of Fannie Mae and Freddie Mac. The thrift raised $7 billion in April from TPG Inc., the Fort Worth, Texas-based private-equity firm run by David Bonderman. `Loss-Mitigation' The TPG deal itself may thwart investors. If WaMu is sold for less than $8.75 a share or is forced to raise more than $500 million in equity within 18 months, it must compensate TPG for the difference, according to filings with the U.S. Securities and Exchange Commission. ``TPG is probably at a loss-mitigation stage at this point,'' Ely said. ``Given how much they have invested, it probably makes sense to double down and then figure out how to get out of this investment.'' A call to Washington Mutual spokesman Brad Russell wasn't returned. TPG spokesman Owen Blicksilver declined to comment. After three days of silence as the stock slid, WaMu yesterday said in a statement that it is ``well capitalized,'' with approximately $50 billion of liquidity from what it termed reliable funding sources. Net charge-offs may increase by less than 20 percent in the third quarter, compared with 60 percent in the previous period. `Confident'

To: patron_anejo_por_favor who wrote (145925)	9/12/2008 2:29:07 AM
From: NOW	Respond to of 306849

cant you please see it to parity just once more; i promise this time i wont miss the chance to load up