Something Happening at WAMU! And More!
Posted on July 14th, 2008 in Daily Mortgage/Housing News - The Real Story, Mr Mortgage's Personal Opinions/Research
1:23pm PST Update - WAMU just put out news that their ‘liquidity exceeds regulatory requirements’. Whew! Haven’t they learned by now that a statement such as this always brings about bad things.
1:01pm PST Update - MORE BANK OF AMERICA NEWS. My friend just left another local BofA branch in more of an industrial area of Oakland, CA and this branch had significant deposits pulled by noon. To counter people pulling money, they are advising people to split up deposits into different family member’s names and SSN’s in order to be covered by the FDIC insurance and nobody went for it. Again, this one small BofA branch lost serious 6-figures in a single morning and I was told this never happens.
12:30pm PST Update - BIG BANK OF AMERICA NEWS. I just talked to a friend who has good insight into Bank of America’s retail branches. He said several branches are taking in MAJOR DEPOSITS today. He said people are coming in depositing large checks. One person brought in a $134k check from Wells Fargo when he was there.
About BofA:BofA is thought to be one of the ’safer’ banks as they did not actively make many subprime or Alt-A loans. They operated mostly in the mortgage ‘banker’ capacity throughout the bubble years, chosing to sell most of what was originated. They do, however, have significant Home Equity Line/Loan exposure but are probably one of the best as far as total exposure goes. This was prior to the Countrywide acquisition of course. Who knows now.
12:20pm PST Update - Update. Reports have come back from several people out at local branches and most said it looks like ‘business as usual’. A couple reported what looked like ‘heavier than normal activity’ based upon their experience at their local branch. We will keep an eye on this for you for any new developments.
10am PST - THIS IS ALL MY PERSONAL OPINION BASED UPON WHAT WAS VIEWED AT TWO LOCAL NORTHERN CA WAMU BRANCHES. I HAVE RECEIVED NO REPORTS OF THIS HAPPENING ANYWHERE ELSE OR NATIONALLY.
I was out and noticed a line out of my local WAMU branch this morning. I then drove a few miles away and saw another branch with many people in line. I talked to someone there and they said the lines started before the bank opened and many people are sweeping their accounts. They did not say ‘everyone’ but they did say ‘many people are sweeping their accounts’.
Today is not payday or Government check day. I could be wrong but I do not think this is to open an account and get a free toaster, as the opening of new accounts has reportedly slowed in recent months.
To prevent runs on other regional banks holding similar mortgage paper is exactly why I think they tried to cover up the IndyMac bank seizure by calling it a bank-initiated shut down of the mortgage unit, which was essentially all they were.
This story is all visual speculation on my part, but in my short years on this planet I have never seen anything like this. This is hopefully and probably justifiable blow-over from IndyMac and the horrible way they managed that takeover, complete with a finger pointing contest between the OTS and Schumer.
It is also my opinion, that WAMU is too big to fail and if anything bad was happening somebody would come to the rescue. In addition as you see with IndyMac, the feds are handing out money to depositors even on non-insured accounts.
This could be all nothing as well, only a larger than usual number of people coming to the bank to withdraw money after a weekend. Who knows. -Best Mr Mortgage.
Other Related Mr Mortgage Stories
Mr Mortgage on Fannie/Freddie Massively Underestimated Risks
IndyMac: Significant Seizure Chatter - Is this finally the end?
IndyMac: One More Lie for the Road! Consumers and Brokers Beware
The Pay Option Implosion - Subprime’s Big Brother
Look OUt! Here Comes the Alt-A Implosion
Mr Mortgage on Mortgage Modifications - You May Qualify!
Mr Mortgage onMortgage Modifications Part 2 - BEING FORWARD THINKING!
July 14th, 2008 2:11 pm
Hmmm. I want to cruise around and do an unscientific survey of Wamu branches in my city myself. What are the odds its systemic slow, poor teller/customer service causing lines?
July 14th, 2008 2:13 pm
What locations are you noticing this?
July 14th, 2008 2:40 pm
there appeared to be no unusual activity in Marina Del Rey or Venice branches
July 14th, 2008 2:47 pm
No worries here in NJ. Was just there 10 minutes ago. Only two people at the tellers in my local WAMU. Another quiet day with no bank runs (yet).
July 14th, 2008 2:48 pm
Thanks. I am rushing out of my office to take my money out a local WAMU…
July 14th, 2008 2:55 pm
Mr Mortgage … you rock sir, of course … now with that prostration & admiration for your work out of the way, is LEH a zero?
many thanks
July 14th, 2008 2:57 pm
get some pictures to CYA!
the SEC just announced a securities rumors investigation.
July 14th, 2008 3:03 pm
Lehman is worse off than BEAR WAS……..mark my words….Lehman cannot and will not delay the truth. Lehman dwarfed Bear in its MBS business. LOL SEE YA LEHMANS
July 14th, 2008 3:05 pm
I am not short the stock or have not advised anyone to get short the stock…lately. I am just reporting what I saw.
July 14th, 2008 3:42 pm
The guy that deposited the $134k from Wells into BofA just made a HUGE mistake. Just wait for the Countrywide write-offs at BofA later this year and into 2009 and beyond. Wells is about the only California bank I would put my money in right now….
July 14th, 2008 3:42 pm
fook ya, stoopid short loser
bashig wamu bc you say the midday lines ?
idiot.
July 14th, 2008 3:57 pm
Ok folks,
#1 use your google or yahoo finance graph’s and look at major bank tickers. Do a 4 year spread. Wamu at 40 a share to what 3? Check out Wamu, Wells Fargo, all the banks etc. Now when you see the trend here of everyone taking a nose dive… ask yourself, what are we doing to if the FDIC cant cover more than 5 or 6 banks going belly up?
Do the math:)
;(
July 14th, 2008 4:04 pm
yes - correct me if I’m wrong but I believe it is the shorts who have been winning of late. Odd, no?
July 14th, 2008 4:07 pm
There is certainly nothing like a run in Seattle. The WaMu branches are characteristically slow (typical Monday). Most customers are making deposits. I visited two branches.
July 14th, 2008 4:12 pm
I jus updated the blog post. Bofa seeing both massive deposits and some large withdraws. Interesting. I have someone inside BofA telling me the story.
July 14th, 2008 4:15 pm
Honestly, and not to sound paranoid— but my wife and I went into a BofA branch in VA today, and withdrew enough cash to keep us in groceries/neccessities for a few months…
When I read on MSNBC that the FDIC has 53 or so billion in reserves, and that Indy Mac could use up to 11 of that, well..you don’t have to be a math whiz to figure out that with 90 banks on the “Scary List”, they could concievably be out of cash prety fast if people started hitting the banks.
The dollar is falling so fast that it may not be worth much in the end, but I would rather be safe than sorry.
July 14th, 2008 4:18 pm
Went to WaMu at the corner of 56th Street and 6th Avenue in New York City just to see for myself after I’ve read this post. The branch seemed to be working as usual and was rather empty if anything. In any case, although I am generally very fond of reading your posts, this one stunk of PR attack on a bank. Mr. Mortgage, is it truly news-worthy when a couple of branches have lines before the bank opens? Even in the current paranoid environment! It’s so easy to pass such BS posts around because no one can prove you right or wrong, right? And based on other comments posted, looks like what you “witnessed” was an exception if anything. This whole post, along with updates seems like a PR stunt ordered and paid for by BofA. I hope I’m wrong…
July 14th, 2008 4:34 pm
Yan - the two constituancies I serve is the consumer and the mortgage broker. I told everyone of the risks the week BEFORE Indymac failed. If those that had over $100k in ther had read my post they may have not have lost money. Who knows. See the posts below and the dates.
By the way, I just got a call from a friend at the Crow Canyon Rd branch at WAMU, which is small. He said there were 40 people there and he waited 45 mins. That is NOT normal.
IndyMac: One More Lie For the Road…Consumers & Mortgage Brokers Beware
Posted on July 8th, 2008 in Daily Mortgage/Housing News - The Real Story, Mr Mortgage’s Personal Opinions/Research | Edit
In my breaking story Sunday afternoon about IndyMac potentially going down on Monday July 7th, I was highly critical of IndyMac’s CEO Mike Perry. I said “last year when things fell apart seeing Perry immediately resort to what seems to me as stretching the truth, doing everything possible to manage the stock price and not the company, blaming short sellers, always guiding higher after earnings and missing, releasing fluff press releases in order to drive the stock price higher etc, it showed me his true colors.” In the story I gave specific examples of these things.
Now, in one last attempt to spin the news, IndyMac has been caught in another half truth that significantly impacts consumers and mortgage brokers, the two constituencies that I try my hardest to serve. CONTINUED… (more…)
34 Comments »
IndyMac: Significant Seizure Chatter - Is This the End? Finally!
Posted on July 6th, 2008 in Daily Mortgage/Housing News - The Real Story, Mr Mortgage’s Personal Opinions/Research | Edit
Note: At this point in time this story is RUMOR as is has not been made official by IndyMac or regulators. I am reporting it from what I have been personally told by people familiar with the matter. And I am not short this stock or trying to start rumors to drive down the price. How much further can it drop! Its at 67 cents. Just remember that when stories like this have come out in the past, there is a flurry of positive spin and in the end, 99.9% are true.
My sources put regulators at IndyMac this weekend doing the deed. I am being told an announcement will come tomorrow first thing, that IndyMac is no more and at least their wholesale operation is gone effective immediately. I would make sense that retail would be included as well, but I wholesale was the only operation referred to. Apparently wholesale sales and operations will get pink slips, no new loans will be locked and all existing loans in the pipe must be closed by the end of July.
I can’t imagine a ‘buyer’ would step up to the plate at this point in time, as in the case of Countrywide, because there is not another Gov’t shill as large as BofA to take her over. IndyMac sits atop 10s of billions in the most toxic of all loans, Pay Option ARMs, HELOCs and subprime. Much of these are on lines or have been borrowed against from the likes of the Federal Home Loan Bank of Atlanta, which in a fit of generosity and stupidity in Q3/Q4 2007 took Pay Option ARMs as collateral before Schumer made a stink. They got suckered into the Pay Option ARMs ‘investment grade’ ratings as well. CONTINUED… (more…)
52 Comments »
July 14th, 2008 4:53 pm
Where’s our June foreclosure report !
July 14th, 2008 4:57 pm
Thank you linda!
July 14th, 2008 5:01 pm
there are so many our computers crashed crunching the numbers. Hahahaha. Just kidding. RealtyTrac put out bad data wanting to beat us on the 10th. The data are finally in and it will be out tomorrow.
July 14th, 2008 5:24 pm
Stop spreading rumors…the SEC will be investigating.
July 14th, 2008 5:28 pm
they can investigate. I can’t hide. I am not short WAMU nor have advised anyone to short it for at least a month.
July 14th, 2008 6:27 pm
Looking forward to the June foreclosure report tomorrow!
July 14th, 2008 6:32 pm
My friend was just in her Pasadena WAMU branch and the FDIC was THERE….
July 14th, 2008 6:50 pm
This entire thing is kind of odd to me… A run on a bank is not constituted by a couple of overly busy branches. The same thing could be said about most banks and any particular one of any of their branches given the tough and openly volatile financial industry. Don’t get me wrong because I agree they are indeed in trouble, but no run today people.
Will WAMU make it through the week? Who knows?? I do doubt they make it through the month. Their stock is below that $5 mark and falling fast. It is possible that the FDIC does not allow them to actually fail as they did with IndyMac and just outright take them over before it happens. I think we will see more of that. It is much better for the headlines and smarter for saving what little equity is left.
What I think will happen now however, with this report and ensuing reports on other websites that I have seen, is a small run will likely take place tomorrow. The media power is strong and people react… especially to fear. Your report grew legs and became an internet report. Not good…
During these very, very volatile times, responsibility is key to any success of stabalization so we can truly figure out WTF we got on our hands.
Just saying…
July 14th, 2008 7:30 pm
Mark,
You have too many readers now to not pay attention to the details. Some of these bozos will do whatever they can to discredit your hard work and timely articles.
Whoever was lined up outside of WAMU is not able to make much of a dent to their deposits. Anyone of intelligence or substance would have wired their money out of the bank or just deposited a WAMU check into another account.
Most banks do NOT have endless sums of cash on hand and will often limit withdrawals to 10k unless they had made prior arrangements.
Be careful in gold; it has bubble written all over it. We are rapidly approaching the time when stockpiles of canned goods and ammunition will be the best investment.
Lets hope I am wrong.
July 14th, 2008 7:54 pm
The runs are on the shares not the deposits…and it is too late to jump on that train.
July 14th, 2008 7:55 pm
While I agree that most of today’s damage is done in quite a different manner these days, one could argue that the largest and most media influenced segment of the population are people 60-100. Are they not the largest segment of the population now? Wouldn’t they be easily the most inclined to make a “RUN”? Don’t be so sure old school methods do not come back into vougue…
July 14th, 2008 8:02 pm
Looks like another bank is in a full court press… Downey savings and loan closed at $1.28 per share today. An obvious new low and one that has stark contrast to IndyMac right before their final decline.
They are on the Feds “Watch List” and mentioned on many MSM outlets as a lender to “WATCH” so we shall see…
July 14th, 2008 8:19 pm
a friend of mine went down and got a $60k cashiers check and took it to Wells. Many I talked to today, especially in my area saw packed Wamu branches all day long.
Easy wiring is something fairly new. Even a couple of years ago, wires were a mess. If you were worried about the bank you want your cashiers check in hand and might not trust they will wire.
I don’t buy it. I bet if you asked 100 people how they would cash out their account, most would go in person to make sure they walked out with a check.
In addition, if you were planning on using the proceeds to open a new account, you would need the check because you may not have an account to wire to.
I have to be careful what I write but I have not been wrong about any company (other than HRB) yet. Look what happened after hours. WAMU came out with the death announcement.
From the signs I see, people are leaving Wamu in droves. Whether that will hurt the bank is another thing. I just reported people were taking money out. I am willing to bet, today was the single largest withdraw day in Wamu’s history.
July 14th, 2008 8:30 pm
Stu and whomever………..
Well everybody seems to be on tippy toes nowadays and rightfully so. With IndyMac down, it is not unlikely that a few cautious ones might have had the forethought to front run any possible problems with Wamu. But excuse me for a minute but where was the Fed who is allegedly in charge of money supply and bank oversight when all of this was being created? We have 12 branches and each has an economist. What were they doing? Arguing as to whether it was a bubble or not?
Now here we are and the Fed whom should have moved long before and failed, is now to be given more power? Oh please, this all seems to be a repeat of 911 in slo mo. We can see the plane headed for the building but are somehow in denial that the plane is going to hit. Then the plane hits and we act all surprised! Maybe if instead of bailing out investors in Fannie Freddie bonds they should axe that and put the money instead into backing the FDIC. Already you can see that people are counting how much is left in FDIC coffers and perhaps one more large failure and the run is started. But noooo… we are all watching as if somehow the plane is going to veer off at the last minute and we will somehow be spared.
I don’t know about you guys, but in my circle of friends, we were talking about this years ago about how it was all going to go bust and had created a total false economy. None of us had any formal training or collage degrees but were apparently armed with common sense. I can see the plane, you can see the plane, but we are all going to sit in denial until the plane hits? Mr. Market did not create this “on edge” situation where there will be wars and rumors of wars. Nor should he be blamed for reporting his observations and asking for conformation.
As I see it, Mr. Market is operating well within his right and no claim of intentional mischief shouold be implied or warranted.
July 14th, 2008 8:43 pm
Again… while I agree with you and your individual account and subsequent reporting of said account, it is now more important than ever to be dilligent. You tend to be and I admire that, but don’t lose sight in the turmoil is all I am saying (I know… this coming from me of all people).
Citigroup, Downey, Horizon, etc. are all hurting and all of them will have a “RUN” of some sort in my opinion over the next few weeks or months, but reporting seeing it and it actualy happening are two very different things…
As I said IMO WAMU is done and so is Downey now by the looks of it… but I have no proof or nationwide data to back up that opinion. It is purely MY OPINION! I don’t have the media outlet you have so I can get away with that. YOU do however…YOU DO!!!
July 14th, 2008 9:19 pm
point taken stu
July 14th, 2008 9:28 pm
Apologies please,
That was meant to be Mr. Mortgage not Mr. Market, I accept 35 lashes in advance……. That was not intentional.
Let’s look at this another way. You are Mr. Mortgage. You drive to one WaMu. You check things out. You drive to another WaMu, and get the same story.
Upon leaving the second WaMu, do you drive to a third WaMu or do you go right away to command central? If it was me in this exact same situation, I might have been inclined to go to command central after the first WaMu. In this case, Mr. Mortgage was diligent in going to the second WaMu and then going directly to command central to report his observations.
July 14th, 2008 9:55 pm
Hey YAN!!
Well buddy, things may look fine in your corner branch right now, but please don’t be slamming Mark here for giving an honest assessment of what he sees. He has been RIGHT about almost everything he talks about, and as a faithful reader, I would say you would be smart to do a whole lot more listening, and less condemning!
He was ahead of the ball in predicting the whole Indy implosion, and I was on the mainstream financial sites all day, after reading his post, just in AWE that NONE of them were talking about the coming Indy Mac crash…???? Then, when the FEDS did come in, they tried to sugar-coat the situation for a day or so, and THEN…All hell broke loose, and we realized it was finally billed for what it was–TAKE DOWN CITY. My thought is they are trying like hell to keep the masses calm, so they are going to try a much quieter way to announce it.
Today, I saw Indy Mac customers on tv, that were NOT privy to any information obviously, and have lost their life savings, because they had OVER the 100K FDIC insured limit in there!! Betcha’ THOSE people would give anything to have a forum like this…they didnt have a clue from the news they had seen on the mainstream sites!!
Best of luck to everyone out there. My advice, is to definitely have a cash cushion at the ready, in case things go south. When the market turns, it turns on a dime, so keep watchful.
July 14th, 2008 9:57 pm
Your making my point… YOU would have and probably so would I, but we are not Mr. Mortage…
July 14th, 2008 10:05 pm
P.S……Everyone has been so caught up with the F&F Bailout announcment, that they didnt CATCH the part about how the banks are now likely to be left to the wolves—
MSNBC - The U.S. government is signaling it won’t throw a lifeline to struggling financial companies — except for mortgage linchpins Fannie Mae and Freddie Mac — marking a shift to a new and potentially more volatile phase of the credit crisis.
Such an approach could mean beaten-down investment banks like Lehman Brothers Holdings Inc. and regional banks must now fend for themselves as they try to recover from billions of dollars in mortgage-related losses. That is bound to unnerve an already turbulent Wall Street and make investors even more anxious as they await financial companies’ earnings reports that are expected to be down a stunning 69 percent from a year ago when all the numbers are in.
July 14th, 2008 10:10 pm
My NEW and most out of touch Representative on the hill: Barney Frank
What a schill and utter total disgrace to our government… As Paper Economy reports:
“Within our exchange you essentially issued a challenge of our respective predictions for the fate of Fannie and Freddie when you wrote the following:
“I am glad to have your prediction that we will soon be engaged in a “federal bailout of Fannie Mae and Freddie Mac,” because I disagree and this will give us some measure of the accuracy of our respective predictions in this regard.”
As we now see today, your outlook was seriously flawed”
Gee you think? I know 20/20 hind sight is easy, but this was WELL BEFORE he made an A%$ out of himself!!!
Vote them ALL OUT!!!
July 14th, 2008 10:21 pm
Looks like Lehman trial balloon while giving the middle finger to the markets -
Headline (Bloomberg): Lehman Should Go Private, Fox-Pitt’s Trone Says
http://www.bloomberg.com/apps/news?pid=20601087%26sid=adyf_bZtTAbs%26refer=home
[``Lehman's best course of action would be a `going private' transaction, since it is the public equity markets that are the threat to the company's survival,'' Trone wrote in a note today. ``Without a public stock, there would be no shorting, thus no motivation for rumor-mongering, thus no source to spook the counterparties and creditors.''
``This would eliminate the disconnect between Lehman's true financial condition and current stock price by eliminating the run-on-the-bank discount in the process of the buyout,'' Trone wrote. ``This value-release would be big enough to avoid the need for leverage.''
Lehman employees own about $2.5 billion of the current market capitalization, according to Trone. The company could be taken private through a buyout consortium, sovereign wealth funds or other purchasers, he said.]
Hmmm…interesting - public markets are a threat to its survival.
July 14th, 2008 10:27 pm
WaMu branch Vancouver, WA across from appears normal.
Don’t forget Nat’l City Bank (NCC) had trading stopped for announcement to quell rumors today.
Financials totally trashed today. We will have to wait & see if this continues and/or picks up steam.
Thank you Sen. Schumer! Mission accomplished!
July 14th, 2008 10:36 pm
Trust me when I say “This WILL pick up steam”
July 15th, 2008 7:44 am
OK, I am watching Bill Ackman on CNBC right now talking about solutions for Fannie and Freddie. THIS is the man that needs to be talking to the Senate, not Ben Bernanke. He is showing some great graphs that breakdown their senior, common and preferred debt.
Hearing him speak in such a clear and specific manner about the challenges we face just underscores WHAT COMPLETE idiots Ben and Paul are, and WHY, if they are the ones essentially educating our elected leaders, WE ARE IN DEEP TROUBLE!! Our leaders are not getting the truth from Ben and Paul, and they are definitely NOT getting any sort of complete picture!!
July 15th, 2008 7:57 am
Be careful in gold; it has bubble written all over it.
Not even close…yet.
July 15th, 2008 7:59 am
carl,
I was watching that too,….the problem is the idiots in washington are too busy pointing thier fingers at each other, then finally in the dyke, hoping the sheep won’t notice we are in deep trouble. Rome is burning, and they are trying to put it out with thimbles. Today is shaping up to be interesting, and most likely not pretty…let’s see the retail sales numbers, and the ppi - I wonder how fudged they will be?
July 15th, 2008 10:44 am
Mr. Mortgage- Thank you for the insightful blog.
I see you are from the bay area- I bought a home in 2003 in Hillsborough an old money high end sub-market from San Mateo and my dad has a house in Sausalito. I have not seen any significant declines in the Hillsborough market so far- but I am starting to see a few sellers selling their homes 5-10% less than the originally bought them for. This seems like nothing compared to the East bay and Central Valley housing market 50% losses in many places———- question: Do you believe this is a sign for things to come in high end ‘Old Money’ bay area housing or would you say they are not flooded with toxic loans and well insulated from significant depreciation.
Thanks in advance for your time!
Luca
July 15th, 2008 1:23 pm
Can we have the list of the 90 US banks on the brink of bankruptcy ? The FDIC (fascist deposit insurance corporation) refuses to give the information.
Apparently, they want to calm the prevalent panic. Morons ! These stupid morons are giving supplementary reasons to people for withdrawing their money. That’s what you should do.
July 15th, 2008 2:09 pm
Bank Rating Services
——————————————————————————–
The FDIC never releases its ratings on the safety and soundness of banks and thrift institutions to the public.
However, there are private companies that provide their own ratings of these institutions.
As a service to consumers, the staff of the FDIC Library has compiled a listing of several financial institution rating services.
Disclaimer: This list should not be construed as an endorsement or confirmation by the FDIC of information provided by these companies.
Services
The bank rating services listed alphabetically below offer a variety of online, web-based, paper and CD-ROM based services that cover banks, bank holding companies, savings and loans and savings banks.
These services usually assign each institution a letter grade or numerical ranking which is meant to indicate the safety or soundness of the institution.
These rankings are determined through the use of proprietary formulas that are applied to data collected by the bank and thrift regulatory agencies. These formulas vary from service to service.
Most of the formulas use data based upon some variation of CAMELS rating factors – Capital, Asset quality, Management, Earnings, Liquidity and Sensitivity to market risk.
DeNovo institutions have unique characteristics that ratings formulas may not fully recognize.
Most of the rating services offer subscriptions to specific print and online publications. Several offer ratings over the telephone.
Please contact the companies listed to obtain further information about the full range of services and products offered.
A.M. Best Company
Website: http://www3.ambest.com/banks/default.asp
Oldwick, New Jersey 08858-0700
Phone: (908) 439-2200 x5633
Fax: (908) 439-2237
e-mail: banking.analysis@ambest.com
Product:
Best’s Bank Deposit Rating (BDR) is an assessment of the operating bank’s ability to honor its ongoing obligations to depositors
Best’s Issuer Credit Rating (ICR) is an assessment of the bank’s ability to honor its ongoing senior-most obligations.
Best’s Bank Debt Rating is an assessment of the issuer’s ability to meet its ongoing financial obligations to security holders when due.
Ratings on a scale from ‘aaa’ being the strongest to ‘d’ being the weakest, and may be enhanced with a ‘+’ or ‘-‘ to indicate whether credit quality is near the top or bottom of a category.
Institutions rated:
U.S. banks and bank holding companies.
Rating method:
Primary Rating Principles:
Quantitative as well as qualitative assessments of banking operations incorporating management meetings and discussions with the rated institution.
Industry peer comparison.
Long-term focus through industry cycles.
Rating profile determined by both current and stressed conditions.
Consideration of impacts of affiliates and parent companies within the group.
Key Rating Considerations: Long-term core earnings capability:
Historical earnings from core operations.
Development of additional viable business lines for future earnings generation.
Business profile:
Franchise strength (brand recognition, defensible market leadership, niche stronghold, long-term client base).
Competitive dynamics within pertinent markets.
Profitability, stability and growth potential of primary lines of business.
Diversified mix of assets and revenue sources (interest vs. fee income).
Balance sheet strength:
Liquidity profile (adequacy of funding to support existing business/future growth as well as diversification of short-/long-term sources of funding).
Core capitalization (quality/adequacy in providing protection and capital requirements for existing business/future growth).
Capital structure and financial flexibility (degree of leverage and short-/long-term access to various sources of financing).
Asset quality (reviewed against de facto measures of credit loss statistics/risk concentration, as well as on credit risk management and administration).
Risk management:
Measurement and management of risk factors: interest rate, market, liquidity, currency, operational and other risks.
Organization and control systems.
Integrity of data and modeling techniques.
Back-end validation testing.
Other factors:
Regulatory structure.
Management and corporate governance.
Parent company and affiliated operations.
Cost:
Bank Credit Reports are available to the public at a cost of $75.00 for each company report. (Separately, banks that are rated by A.M. Best are charged a rating fee, based on asset size and other criteria.)
For further information regarding A.M. Best Ratings, visit A.M. Best’s website at: http://www.ambest.com.
Some others are as follows:
Bankrate Inc
BauerFinancial Inc
Creative Investment Research Inc
Financial Information Systems LLC
Highline Data LLC
IDC Financial PublishingInstitutional Risk AnalyticsLACE Financial Corp
Veribanc
Weiss Ratings Inc
July 15th, 2008 2:15 pm
Thank you Stu for the information.
July 15th, 2008 7:29 pm
Ok, you guys in Hillsborough with the old money…you’re asking the wrong people I think…if you have old money, what do the old money people think? Ack! Forget that! They looking for pillowcases right now! LOL
Seriously, I just had a conversation with my husband - we’re in the Bay Area too - professional Real Estate Investors - OMG!!!! with some old and new money…and we think the hardest hit will be the worker bees, but here’s the clincher, what happens to the queen bee when the workers die off? How depressing!
I think we’re in a world of hurt. Who is going to buy our high priced houses if only high income people can afford them and they want out? Who is going to be able to pay even rents consistently with a crash? If your house is paid off, good, stay put, plant a victory garden…we don’t have the former, but I’m leaving now to the store to buy some seeds to sow~!
I bet the price of booze goes up as demand increases! LOL
July 16th, 2008 10:46 pm
Very interesting. Today I went to buy some gold from my dealer, and his office was closed. The note on the door said, “Thursday, July 10th. Clients, I have just been approved to do an appraisal for one of the countries’ largest banks. For security reasons, I will have to close my doors for two weeks. Please call _______ for updates.” My coin and bullion dealer is one of the oldest in the business. He’s had his coin shops (now down to one) for over 50 years. The only thing I can imagine is that a “large” bank needs a specialist in metals and coins to appraise their holdings for official reasons. Very interesting. BTW, I live in Las Vegas.
July 17th, 2008 8:18 am
Well you can be sure that foreigners have stopped believing in the bullshit produced in industrial quantities by the US financial industry. Two days ago Fannie and Freddie were going bust. Indymac is busted.
And wow suddenly like by miracle all the banks earnings are not that bad. Bastards ! I have finished believing any bullshit coming out of banks. They make the numbers they want. It’s like the phoney government statistics and the psychopath Bush. “Our banking system is solid.” Bullshit.
July 17th, 2008 11:51 am
Even the credit default swaps on the debts of the US government are exploding. Now this is real news. Woa !
http://www.nakedcapitalism.com/2008/07/phony-accounting-on-fannie-freddie.html
July 21st, 2008 12:28 am
Are they next after Indymac ? Can we venture that there is a strong probability of a bank run on Wamu ?
July 21st, 2008 3:00 am
I dunno… I can see Wamu’s HQ from my over-priced apartment. Looks like business as usual here on the streets of Seattle….
September 24th, 2008 8:02 pm
The Titanic was too big to sink.