Big Bank in trouble

The biggest savings and loan, Washington Mutual, got a cash infusion of seven billion. It will report a loss of over one billion. The biggest S&L WaMu is in trouble because house prices are falling. I talked to a realtor yesterday and he told me prices are in free fall; because banks do not loan money, you must pay cash for a house. As a result you are seeing prices tumble out of control.

Big banks are seeing more and more loans go bad as people are unable to pay loans due to a poor economy. Also the high future oil price means less money will be available for other things.

In the future, I see further housing price erosion as the economy gets worse and more people lose their jobs. The banks are now dumping foreclosed houses on an already saturated market, and they want cash.