Washington Mutual Inc. (NYSE: WM) is looking exactly like "The Good, The Bad, and The Ugly."  The difference is that this one is real instead of a movie.  Shares are down yet another 29% to new 52-week lows.  The reality is that this represents lows not seen since the early 1990’s.  It has gotten that bad.

Forbes noted Dick Bove at Ladenburg Thalmann having noted it as one of the likely banks on the edge in a recent report along with about 100 other banks at risk.

It has become impossible to draw the line between research reports, fears, and even rumors at this point.  If a run on the bank occurs and if a banks trading parties cut them off, then they are about as good as done.

We have just seen National City Corporation (NYSE: NCC) have its shares halted with a "NEWS PENDING" status after it fell some 27% to $3.20.  The news release from National City has said they are not experiencing unusual deposit or creditor runs to address "market rumors."

Everyone keeps running break-up values on the major financial institutions.  The problem is that the balance sheets are currently still in a near-impossible situation to analyze.  The pool of bidders are likely to focus on those healthier institutions that may be up for grabs because they have seen shares plummet in sympathy.   

Perhaps a better title for this movie would be "Fall Street."

Jon C. Ogg
July 14, 2008

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