Editor's note: The credit markets have been the epicenter of volatility on Wall Street throughout the second half of 2007. Falling home prices and subsequent defaults on mortgage-backed securities led to a liquidity crisis that's expected to get messier in 2008. The outlook for companies in the financial sector and beyond is dim as corporate profits weaken amid a weakening economy and rising inflationary pressures. This is the second installment in an ongoing series about how the tumult in the credit markets will affect the economy and the markets in 2008.
Washington Mutual(WM Quote) built itself from an obscure Seattle-based savings and loan into a national retail banking powerhouse with a heavy emphasis in mortgage lending.WaMu's Capital-Raise 'Insufficient'?
Banks need capital to have some basis of borrowing -- or leverage -- for their businesses and to expand their balance sheets by making loans or purchasing securities. The catch is that as a bank grows its business, its capital ratios fall. Therefore, banks must work through the tricky task of growing earnings while paying dividends and maintaining capital levels.- Loading Comments...
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| Dow Jones | S&P 500 | NASDAQ | 10-Year Note | |
|---|---|---|---|---|
| 10,023.42 | 1,069.30 | 2,112.44 | 35.03 |
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