Washington Mutual (NYSE: WM) is having such trouble that it will lay-off another 1,200 people.
According to Reuters, "In an e-mail, Washington Mutual said it was cutting jobs that support its home lending unit, centralizing some support functions, and focusing on 'mission-critical activities.'" The announcement was part of a cascade of tough news for financial companies.
Not only have Lehman (NYSE: LEH) and Morgan Stanley (NYSE: MS) posted poor results, but Citigroup (NYSE:C) said its expected more write-offs through the end of the year. The head of hedge fund Paulson & Co. expects total losses at banks to hit $1.3 trillion, with two-thirds of it yet to come.
Short interest in most large financial companies moved up sharply in the period ending June 15. Shares short in Wachovia (NYSE: WB) moved up 26.2 million to 177.4 million. Short interest in Bank of America (NYSE: BAC) jumped 18.2 million to 82.7 million.
Most of this means that bank, brokerage and insurance shares could be much lower at the end of 2008. Many already trade at 52-week lows, but if losses mount, they will have to raise more money, and that means dilution.
Citigroup trades for under $20 in premarket action. As a bellwether for the industry, who would be surprised to see it at $10?
Douglas A. McIntyre is an editor at 247wallst.com.
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Reader Comments (Page 1 of 1)
6-20-2008 @ 10:56AM
alan bernson said...
Washington Mutual : Washington Mutual is a defendant in several class action suits brought by stockholders , borrowers and others.
I am looking for an article or blog that will give me, in ONE PLACE and in ONE ARTICLE a summary of these suits.