10pm PST – Update…management still in meetings. I think the street got this one wrong. They ran WM stock price today as if it was another LEH style BS bailout. I have a hunch this will be totally different. Perhaps $2.5 Bil in common, $2.5 Bil in preferred…potential death-spiral financing. And no 7.25%…may be much higher.

Nobody is going to take on $65 Bil in Pay Option, $60 Bil in Home Equity, $20 Bil in Subprime and $40 Bil in weak credit card debt on the cheap. This is a bailout deal and will make suspect all other financial insti’s who need to raise money over the next few weeks. The street was using LEH as a proxy for the way all other deals would get done…no way you lemmings.

3:3-pm PST – YOU HEARD IT HERE FIRST! More to follow…WAMU closes wholesale lending effective immediately. This Thursday is the last day to submit/lock. It looks like to me, that this $5 billion was a bailout.

-Best,

Mr Mortgage