Washington Mutual - One of the Nations Largest Banks Having Trouble

WAMU ABOUT TO SNEEZE AND CATCH A COLD

By Alex S. Gabor

Jim Cramer said that there's "no global economic slowdown." By contrast, Cramer also said, "the world is growing too fast for the Fed's comfort when it comes to inflation".

In my honest opinion Cramer's statements are idiotically made by the currently biggest media mouthpiece that was ever hired to pump and dump stocks for Wall Street in the history of stock fraud!

If the world is growing too fast and the Fed is worried by inflation that would mean a rise in interest rates too sooner than later. Why would it be too sooner?

Because right now the housing market has already been deflated by at least 10% over the past year and if that is not enough to signal the beginning of a recession, wipe out $1.4 trillion of home equity across 300 million homes in America and it averages about 3,333.33 per household in lost wealth.

Not much to stir about in a $13 trillion economy with more than 100 million used cars running around is it? A rise in interest rates by the Fed would only exacerbate the problems being confronted by the entire banking industry.

And in California, where housing prices have been hit by as much as 50% in the 6th largest sovereign economy in the world, there is significant deflation and depression setting in, particularly amongst mortgage brokers, real estate agents, builders and other real estate industry service providers. The banks that have fueled their inflated paychecks for the past decade are in for a rude awakening.

Get ready, if you own property in the USA, to take another 10% to 20% hit on your home equity, and if you haven't sold yet, you may not be able to any time soon without shorting your own mortgage, especially if home values drop below your current outstanding mortgage balances.

Both Downey Savings and Washington Mutual are about to catch a cold, perhaps go into a fatal fever and wind up in shot gun weddings with healthier, more financially honest and sound institutions.