A Penny Saved

Call me a doomsayer if you like, but it’s all coming down now.  Not in a big crash as some had expected, but it certainly is deflating.  Washington Mutual announced their numbers yesterday and their profit is down 20%.  Why?  Deflating Real Estate loans.

a loss in its home loans unit, driven mainly by subprime lending weakness, caused a 20 percent slide in first-quarter profit.

They go on to say that the loss is actually less than they thought it would be so it wasn’t as bad as it looks.  Sounds like a little bit of sugarcoating to me.  A loss is a loss.  Take for instance the fact that they had a $113 million loss this quarter and it was a $52 million gain at the same time last year.

At best, if you graph it out, it looks like a bubble.  At worst, it’s a straight line down.  No ifs, ands, or buts here.  POP!

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