It has been several months since I've had the opportunity to post. My mother taught me that if you can't say anything nice, then don't say anything at all.......
Mom...I apologize in advance for ignoring your wisdom.
I can't resist any further; and NO, I will not tell you what WTF means....I can't tell you everything.
This industry that I'm in is coming apart at the seams. You know that while I've always been wise about my investments, as well as the movements I made throughout my career, none has affected me as negatively as my days at WaMu. I spent the most painful year at my life at that institution as the leadership under Kerry Killinger concentrated on what I felt was the riskiest program for the everyday consumer; the Option ARM that allowed you to add to your mortgage balance under the assumption that values would continue to increase until the end of time. Realtors, Mortgage Brokers, and the whole world preached that it would be 'easy enough to get out of'. Well, let's say that didn't quite worked out the way it was promisted. It allowed me to see an opportunity that reminded me of your career in the aerospace industry that in many ways became the impetus and basis of my book, Finding Foreclosures, by Entrepreneur Press.
You taught me to live within my means, manage my credit, and purchase real estate, while always working on continuing education as a way of staying ahead of others.
I have not amounted to being the CEO of a major bank such as Washington Mutual, but I have to wonder if wouldn't have done a better job, given my background.
Within 30 days of starting with that institution, I realized that the compensation plan was changed to reward everyone for pushing the most profitable products, without understanding if it made the most sense for the consumer. I care because it was the wrong thing to do.....What ever happened to tangible benefit?
Today, I read an article of which I've copied some of the pieces out.
The government's efforts to find a buyer, though, are being complicated by uncertainty about the magnitude of losses still lurking in Washington Mutual's home loan portfolio. "No one knows what's in their books," said a person briefed on the talks between regulators and banks. The person spoke Wednesday on the condition of anonymity because of the sensitivity on the matter.
Forgive me Mom, but this is total bullshit. I could repeat the things you or Grandma would say in Spanish, but then I'd really get in trouble.
As of 30 days ago, WaMu was reported as having close to 50% of their Option Arm portfolio, that was 60 days past due or more. This does NOT include the over $200M worth of home equity lines that have been frozen, closed, or also past due. That has to be in the billions of dollars in debts, not including the deferred interest that WAS recognized as income according to their accounting practices.
Do I feel sorry for the employees? Absolutely.
Yes, BUT I also know they will be far better off if JPMorgan Chase (or anyone for that matter) buys them, since they've been looking at them for years. I know at this point the government will not jump in as they have to draw a line in the sand somewhere, since you can't bail everyone out.
AIG Insurance just received an $85million injection of capital. I would take 1% of that right now. I don't know the insurance sectors financials well enough, but I know that when government steps in, it cannot be a good thing.
The lessons we've learned from this debacle in the financial sector, which includes real estate and mortgage, have made me realize how right you were all along. Wow...did I just say that? I may have not wanted to listen over the years, but I thank you for teaching me to humble and learn the lessons that an economy should not be built on constantly consuming more and more.
My behavior has already changed in the last year, as has that of my wife and kids. So let's get this over with, move WaMu and any other banking, investment, or real estate institution, into an environment where they are sold, bought out, dismantled, and forced to re-capitalize instead of making countless excuses as to why it makes sense to keep them around.
I know that my family, as well as society will be better off the faster we untangle this mess. It took years to create it; since its been close to 18 months, can we just get it over with, and get rid of the media spin, such as this other piece of the article that I saw....
After losing $6.3 billion in the past three quarters, Washington Mutual believes it is slowly healing under a new chief executive, Alan Fishman, who will receive an $8 million bonus if he can keep the nation's largest thrift alive through 2009. "I think people do know what is in our books and we've been pretty transparent," WaMu spokeswoman Olivia Riley said Wednesday, pointing to a financial update that the company released late last week. Those figures suggested WaMu's loan problems are becoming less severe compared to recent quarters, giving some analysts hope that the company can still be salvaged. Nonetheless, analysts still expect the company to sustain a loss of about $1.8 billion in the current quarter ending Sept. 30. And investors are showing little confidence in WaMu. The company's shares fell 31 cents to $2.01 Wednesday, leaving the stock price with a decline of about 85 percent decline so far this year.
Really? $6.3 billion in losses is that it?
WaMu, you've been transparent by saying that your problems are becoming less severe? Does that mean you're still going to die, but you're going to hang in there an extra couple of weeks? Spare me.........just die already. Quick and painless (unless you're an employee or a shareholder.....I digress....)
Mom, it is inevitable that I will piss someone off by writing this, but seriously, I just couldn't hold out any more. I'm tired of waking up to hear those in different parts of my industry bicker and moan that its so difficult now....or that they somehow can't make the 3 to 4 points that Wamu was used to paying the broker community, who in turn blames WaMu for allowing them to participate in such thievery since all they did is sell the product, albeit it a far higher price and margin than was necessary, but again, don't let me get off track. My little brain might explode.
When WaMu is gone, then we will have a REAL reason to go Woo Hoo!
In the interim, I just have to think.....................WTF? What have we come down to?
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