Washington Mutual: What's Another $3.3 Billion?

Washington Mutual proved yet again that it could extract more value from its operations by firing everyone except a few beefy guys to shovel deposits into an incinerator. Can a handful of former bankers work fast enough to incinerate $3.3 billion in a quarter? It seems unlikely.

However, the bank had no problem burning through another $3.3 billion on its lousy portfolio of assets.

The Seattle thrift reported a net loss of $6.58 a share, which included a charge related to the $7 billion capital raise the company announced in April.

Excluding the charge, WaMu reported a loss of $3.34 a share. Apparently, analysts, if you still care what they think, were expecting a loss of $1.05 a share on this basis.

Naturally, the stock immediately ripped higher after the earnings report. Why? I haven't a clue. I suppose the same reason that Wachovia rallied nearly 30% after reporting an $8.9 billion loss before the open.

If anyone out there knows the reason, feel free to enlighten the rest of us. In the meantime, I'll be scratching my chin until I come up with an explanation.

Source: By Mock The Market http://mockthemarket.blogspot.com/

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