Goldman recommends short selling Washington Mutual

I hope this is not from the same analysts that drove WM with his neutral rating down from close to $40 for the last few years ...... At least they woke up and cut to a sell in February. Why they have still a price target close to 10 is beyond me. With massive dilution already in place & on the way & no earnings in sight for years only "Wall Street Finest" are able to come to such an accurate number...... At least they have the balls to call a stock a short candidate. To my knowledge a very rare event. Too bad that they missed the easy money from $40 to $12..... Short interest in WAMU is already close to 20 percent ..... And when i start reading comments like this via Morgan Stanley Draaisma: “2008 the Best Period for Shorting Since 2002″ you have to ask where were those guys during 2007.......... One more similar story during this afternoon and i´m viewing this as an contrary indicator and i´m starting to get bullish....... ;-)

Ich hoffe das dies nicht derselbe Analyst ist der WM mit seinem neutralen Rating über mehrere Jahre und Kursen von ca $ 40 nach unten geritten hat. Immerhin haben die im Februar endlich auf Verkaufen gestellt. Um bei einer so gewaltigen Verwässerung sowie keinerlei Aussicht auf Gewinne in absehbarer Zukunft und nachweislich einem des übelsten Managements auf ein KZ von $10 kommen kann ist wohl nur erfassen wenn man zum inneren Zirkel von "Wall Street Finest" gehört Die nächste KZ Reduzierung kommt dann wohl mit der nächsten Kapiaterhöhung..... Immerhin haben Sie "die Eier" eine bestimmte Aktie als Short zu brandmarken....Kommt ja nicht alle Tage vor. Blöd nur das dieser Rat nicht $30 früher gekommen ist.... Short Interest beträgt bereits jetzt satte 20% ...... Wenn ich dann noch Ratschläge wie diesen von Morgan Stanley lese Draaisma: “2008 the Best Period for Shorting Since 2002″ muß man sich schon fragen wo der im Jahr 2007 Urlaub gemacht hat..... Noch eine solch geartete Meldung mehr an diesem Nachmittag und ich werde bullish... ;-)

Goldman recommends short-selling Washington Mutual

Goldman Sachs recommended short-selling Washington Mutual in a note to clients on Friday, and cut its price target to $10 from $12. "The bad news is that our new product-by-product analysis of its mortgage portfolio suggests $17 billion to $23 billion of embedded losses in WaMu's current book of business, of which only $3 billion have been absorbed so far; subsequently, we forecast a $14bn provision charge in 2008," the broker said. The good news is that it believes WaMu's $7 billion capital raise should be sufficient, seeing a year-end tangible-equity-to-tangible-assets ratio in excess of 7%.

Let´s hope the chinese Walls have prevented a conflict of interest......

Bleibt zu hoffen das die Chinese Walls innerhalb von Goldman funktionieren.....

I Want My Buyback Back..... Washington Mutual Edition Part II

They really should have hired Homer or Paris Hilton to run the company.... No joke! After attending the conference call back in Jan 07 ( see Flashback January 2007 ) even the dumbest outside Wall Street could have predicted this outcome. Here is more from Mish . Mish has done another update WaMu Raises Cash, Skeptical Eyebrows

Denke Homer oder Paris Hilton hätten das besser hinbekommen....... Traurig aber wahr! Jeder der wie ich im Januar 2007 ( siehe Flashback January 2007 ) sich den Call angetan hat konnte genau das vorhersehen. Voraussetzung natürlich man arbeitet nicht an der Wall Street......Hier gibt es mehr von Mish . Hier ein weiteres lesenswertes ein Update WaMu Raises Cash, Skeptical Eyebrows von ihm.

Flashback January 2007

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 ( Stock close to $ 40 )

Fast forward April 2008 Washington Mutual Gets $7 Billion From TPG-Led Group

Wahington Mutual the largest U.S. savings and loan, got $7 billion from a group of investors led by David Bonderman's TPG Inc. after losses on subprime loans ate up capital and erased 74 percent of its market value.

Washington Mutual sold 176 million shares at $8.75 a piece, 33 percent below yesterday's closing price on the New York Stock Exchange, and preferred shares, the company said in a statement today

Bravo!

It will be interesting to see how long this infusion will last......

Bleibt abzuwarten wie lange diese Kapitalspritze vorhalten wird......

I Want My Buyback Back "Washington Mutual Edition"

Today this news is making headlines

Heute kommt diese Schlagzeile über die Ticker

WaMu to Raise $2.5 Billion in Additional Capital, Reduce Dividend, Resize Home Loans Business and Cut Expenses to Fortify Capital Base

Flashback January 2007

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 ( Stock close to $ 40 now $ 19)

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