wamu credit quality....and capitalized interest up 300%.

you wonder that after all the accounting scandals this is legal. nevertheless the quality of the results is very weak. a growing number of the income is coming from the "capitalized interest / neg arms". credit-quality is also worsening etc.

man wundert sich in der tat das nach all den buchhaltungsskandalen solche praktiken immer noch erlaubt sind. aber egal wie man es dreht und wendet. ein immer höherer anteil des gewinns basiert auf zinsen für "kredite mit negativer tilgung" die obwohl niemals gezahlt worden rechtlich einwandfrei als gewinn verbucht werden können (obwohl gleichzeitig die kreditschuld wächst...) zudem verschlchtert sich die kreditqualität zusehends.

net income in the home loan group down from $1.03 billion to a loss of 48 mio!

Capitalized interest recognized in earnings that resulted from negative amortization within the Option ARM portfolio totaled $333 million, $296 million and $133 million for the quarters ended December 31, 2006, September 30, 2006 and December 31, 2005.

Capitalized interest recognized in earnings that resulted from negative amortization within the Option ARM portfolio totaled $1.07 billion and $292 million for the years ended December 31, 2006 and December 31, 2005. ( with net income at $3.56 billion this is not insignificant..../ bei 2,56 mrd$ nicht gerade unbedeutend....)

The total amount by which the unpaid principal balance of Option ARM loans exceeded their original principal amount was $852 million, $681 million, $474 million, $298 million, and $160 million at December 31, 2006, September 30, 2006, June 30, 2006, March 31, 2006 and December 31, 2005. ( up 432%!!!!!)

Increase in nonperforming assets reflects more difficult credit environment. Weaker credit performance, particularly in the company's single-family residential real estate loan portfolios, contributed to the rise in the level of nonperforming assets as a percentage of total assets to 80 basis points at year end from 69 basis points at Sept. 30 and 57 basis points at the end of 2005. The company continued its practice of selectively selling nonperforming loans, selling $176 million in the fourth quarter and $155 million in the third quarter.

Provision driven by credit card growth. The increase in the fourth quarter provision for loan and lease losses to $344 million in part reflected the growth of the company's on-balance sheet credit card receivables, which increased the provision by $95 million compared with the prior quarter. During the quarter, the company also revised its accounting for credit card receivables held for sale and refined its provisioning methodology for multi-family loans. The impact of these two changes was a net increase to the fourth quarter provision of $25 million. The increase in the provision for 2006 to $816 million from $316 million in 2005 was primarily due to the addition of the company's credit card business acquired Oct. 1, 2005.

Subprime mortgage industry significantly weakens during the fourth quarter. During the fourth quarter, subprime mortgage delinquencies continued to rise as credit conditions deteriorated in the subprime mortgage industry. Weakening subprime mortgage credit performance and market conditions negatively impacted the company's fourth quarter pretax earnings by approximately $160 million. This result was driven by a reduction in fourth quarter gain on sale of approximately $110 million, as well as a reduction of approximately $50 million in the value of the company's subprime mortgage residuals to a balance of $168 million at year end.

and of course the company tries to masks the results.....

On Jan. 3, 2007, the company entered into an accelerated share repurchase agreement with a dealer, buying back $2.7 billion of its common stock

disclosure : short wm