Distress Call

I always thought Washington Mutual's nickname WaMu (pronounced "Wah-moo"), sounded a bit like the distress call of a bloated, defenseless, dying mammoth. Now we know why:

"WaMu is most exposed to states where we forecast severe home price depreciation, and subsequent mortgage credit deterioration," the analysts wrote. Goldman expects mortgage-related losses between $17 billion and $23 billion, the analysts said. Washington Mutual may have a $14 billion provision charge in 2008, the analysts said.

I know there are a couple of real estate terms in there, so let me translate for you. "Severe home price depreciation" means property values are plummeting in places like California, Arizona and Florida (all one-time WaMu strongholds), and "subsequent mortgage credit deterioration" means people are going belly-up and walking away from their credit obligations.

Things are going to get worse -- much worse -- before they get any better.