2008-09-09 — wsj.com
"The problem is very simple: They made a lot of bad loans," said Richard Bove, banking analyst at Ladenburg Thalmann & Co. "The solution for their problem is to find some mechanism for reducing the bad loans. That can't be done by a new CEO."
...
WaMu's biggest predicament: It holds large amounts of mortgages made in U.S. regions where housing prices have fallen sharply.
WaMu has $53 billion in option adjustable-rate mortgages, a type of loan particularly vulnerable to default, as well as $16.1 billion in loans made to subprime borrowers, said analyst Fred Cannon of Keefe, Bruyette & Woods Inc.
I think Bove is saying they need to raise more capital. Wonder how they are going to do that ?
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