via bonddad’s diary.
Washington Mutual (WM) dropped 3% after CEO Kerry Killinger said at a Lehman Brothers conference in New York that the housing industry is headed for a “near perfect storm.”
He said the lender, which has already boosted its provision for loan losses this year, may have to sock away an added $500 million as housing markets continue to weaken.
Bonedad points out that that Wamu is by far the biggest publicly traded S&L with a market capitalization of 30 billion. “The next largest company by market cap is Sovereign Bancorp with a market cap of $8.4 billion. In other words, Washington Mutual is the big kid on the block by a fairly wide margin.”
Secondly, he notes that “CEOs are well aware of their status. They know their words can move markets. As such, they are very good at being perma-bulls.”
All righty then. It is not some lefty blogger saying it.