Hilariously named research firm "Gimme Credit" doesn't want to go the way of Bove, or any of the perps Jamie Dimon's got his eye on, but felt that it could not in good conscience not let you know that a loss of liquidity could spell trubs for Washington Mutal. Sayeth GC:
We do not want to be accused of screaming "fire!" in a bank lobby, as John Reich, the director of the OTS (WaMu's primary regulator), said recently. We won't use the phrase "run" on the bank, but we would be remiss if we did not observe that many creditors have quietly been pulling funds from the bank. For example, Fed Funds purchased and commercial paper declined $75 million at 6/30/08, down $2.0 billion at year-end and $3.4 billion a year ago. Securities sold under agreements to repurchase are down to $214 million, from $4.1 billion and $9.4 billion for the year-end and prior-year, respectively. Other borrowings are $30.6 billion, versus $39.0 billion in December. With unsecured creditors taking a giant step backwards, the combined percentage of the balance sheet funded by deposits and the Federal Home Loan Banks has increased to 78% up from 75% at year-end and 71% a year ago. Small wonder Mr. Reich is feeling testy.
Posted by guest, Jul 24, 2008 4:38PM
Suppose you had a LOC at WaMu, with a few thousand bucks still available under it. Would you be cutting yourself a check on the remainder of that line just to make sure you actually got the benefit of that money? You know, before the feds swoop in?