How bad is it? The Street pegged WaMu’s loss at $344 million; instead, it’s a whopping $1.1 billion. And, WaMu is also taking a provision for $3.5 billion in loan losses.
And, why is TPG Capital potentially pounding sand down a rat hole? WaMu’s second-quarter numbers might not get a lot better; pending home sales fell to an all-time low in February. And, as with WaMu, analysts’ advance predictions were off, on the too-sunny side.
“The question was whether things were starting to stabilize,” said Global Insight economist Patrick Newport. “Apparently they're not.”
Newport predicts home sales will fall by another 5 to 10 percent before picking up at the end of the year, while the Realtors group forecasts sales will remain flat in the first half of the year before rebounding strongly in the second half.
Discount the National Association of Realtors report. The NAR is engaging in nothing but PR, not honest analysis, and has been doing so for months. It’s staking its hopes on the higher dollar limits for jumbo loans recently approved for Freddie Mac and Fannie Mae.
But, as I blogged earlier today on my “nouveau riche” post, McMansions are starting to hit the foreclosure chopping block in many places, too.
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