Wamu passes on >90% of their mortage loans to the bond
markets.
This seems to mean that WaMu perhaps isn’t as vulnerable to
bad loans as one might think, at least not in terms of
danger of capital losses.
However, as poway has indicated already, it seems that
earnings are in danger of taking a big hit.
In general, I would caution against shorting. For example,
one could argue that Google is quite overvalued. But I would
think more than twice about shorting it.
I’m speaking from similar experience,
here , and I lost a big bundle 🙂
