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!
[tags]money,loans,subprime loans,wamu,real estate,real estate bubble[/tags]
