I’m also sorry to disappoint you readers (both the loyal oldies and the newcomers), but this influx of traffic is having me rethink the whole blogging about my employer thing. I know most bloggers would give their left nut to be mentioned in the real media, and I know my blogging about WaMu is not quite as risky as blogging about Tibet while living in China, but there are ramifications that I need to more fully think through before I take this to the next level. I was OK with this as long as the audience was relatively small but the enormous rampup in hits from Sunday evening when the P-I posted their story online is giving me second thoughts.

So I have temporarily moved the earlier blog posts offline.  I still have them on my server and can turn them back on in a flash if I decide to.  I hope to make up my mind about what to do in the next day or two.  On the bright side, this does confirm that there’s a pretty sizable market in WaMu talk!

Until then, feel free to read that infamous elevator post below.  And for the love of god please be more considerate riding the WaMu Center elevators.

To refresh everyone: as of June 30, WaMu had $40B in excess liquidity.  With expectations of ~$5B in deposit runoff in wake of IndyMac we would have expected WM to now have $35B in excess liquidity.  That would have been somewhat tight especially in this nervous environment, but as I explored in my previous post, not yet enough to cause alarm.  Still though every day WaMu did not address its liqudity position, more rumors and bogus “analyst” reports sprung up causing uncertainty in the market.  And as we all learned from Benjamin Graham, Mr. Market does not like uncertainty.  This has played out with the enormous volatility in WM stock the past two weeks.

This latest news on $50B is fantastic because in my mind this means liquidity is simply not a problem in the near term.  And from the recent earnings release, we also know capital is not a near-term problem.  To refresh: WaMu currently has an $8.5B reserve plus $7B in excess capital (current tangible ratio is 7.79% vs target of 5.50%) + $1.1B in excess capital they will get by shrinking the balance sheet $20B by 12/31/08 (freeing up that 5.50% capital minimum x $20B) + ~$3B in operating cash flow that they will earn over last two quarters of the year.  That gets me to $19.6B WaMu could conceivably chargeoff in Q3 and Q4 2008 and still meet the bare-minimum of being well-capitalized as of December 31.

Compare that $19.6B in potential vs the $2.2B in actual chargeoffs in Q2 2008.  That number will surely rise in Q3 and Q4, but it’s almost inconceivable that WaMu will run out of capital near term.  Now that we also know WaMu will not have a liquidity problem in the next few months, the near-term survival of WaMu should no longer be in question.  It will survive. 

The real focus now should be on our long-term prospects.  Once the mega-provisions stop and WaMu starts trading on P/E again instead of tangible book value the stock will rise significantly.  Not to $46/share again - remember they diluted half the shareholder base with recent capital raises - but its conceivable stock could be back in the high-teens within 18-36 months.  The underlying earnings stream of the last few years (varying between $0.6B - $1B a quarter) is still there.  If the provision ever slows down, that earnings stream translates to a $29 - $48B market cap company at a 12x P/E.  Divided by roughly 2 billion shares (still haven’t seen official post-TPG share count) that equates to a $15 to $24 stock.  Not $46/share, but if you buy now at $4 who wouldn’t appreciate that kind of return over an 18-36 month period?

The only other real question remaining is: if WaMu “should” have been down to ~$35B in excess liquidity by now, and that included moving all unpledged assets for cash at Fed/FHLB/whoever else would swap assets for cash, where did the excess ~$15B in liquidity come from?  Who provided it, and what sort of usurious terms did WaMu have to agree to to get that funding?

Since the traffic has really picked up in the last few days I thought I’d share with you some of the data that I see, so you can get a better appreciation of who your fellow loyal readers are.  I love this stuff and find it really interesting.  You on the other hand may just find it creepy that I can know so much about you guys.

Note: I made a formatting change that goofed the tracking code for all day on July 21 - that’s why there’s no data

So from July 11 when I started to July 25, there have been 2,587 page views in 905 visits by 662 unique visitors.  Note that the huge majority has come from the last two days (averaging 300 visits and 800 page views each day)

Taking a step further, here is the breakdown of what sites you guys are reaching me from:

Check out the huge inflow from Yahoo finance message boards, especially how “sticky” they are, checking out 2.7 pages per visit and spending nearly 4 minutes a visit.  Upon further review, looks like this particular post by arenas341 on the message board is driving all the traffic.  So whoever you are arenas341 at yahoo, thank you.  You clearly know good websites when you see them.

The next cool thing is drilling in on the clicks from search to see which search terms in google and yahoo are sending you my way.  Here’s the full list, note that 97 of the 185 visits are some variant on wamu bank run.  Whoo Hoo!

The next level is - from which cities are you visiting me? 

Who knew the blog was so big on the eastern shore of Australia??  G’day you guys!  If you throw another shrimp on the barbie and set aside some ice cold XXXX or Toohey’s New I may just have to go visit. 

Also weird that there’s so much traffic from San Jose - 187 visitors - vs just 92 in Seattle.  And last but certainly not least, the visits by server/network.

So surprisingly “only” 214 visits and 648 page views from the WaMu network.  I’d have thought more, but that’s still not bad, and does represent 16 hours and 20 minutes of “work time” spent here.  Anyone willing to take bets on how long before I’m blocked from the WaMu network?  I don’t suspect there will be a mass uprising when that happens, unlike when they tried to shut off ESPN.com a year or two ago.  That lasted maybe a day or two and was when we found out just how much the guys on 31-33 floors read ESPN.com.

Also interesting: #19 TBWA Chiat/Day.  Not sure what a marketing firm is doing checking out my blog (probably didn’t like my shot at marketing on a prior post), but they appear to like the blog as a whole spending almost ten minutes per visit and checking out five and a half pages.

And how about #132 Lucasfilms. Maybe the blog can be incorporated in the next Star Wars movie if they ever get around to making #7, #8 and #9?

Among WaMu competitors I see BofA at #35 (though all bounces, meaning they closed website or didn’t further click links).  Chase is at #42 with a couple of extended visits (feel free to post guys, especially if you want to comment about this article) UBS at #59 and stopping by for one visit Astoria Federal at #72 and Puget Sound Bank at #182.

So if I want to drive more traffic I should evidently blog more about bank runs and/or post links to my website on Yahoo Finance - I guess that’s where the current critical mass of WaMu readers read. 

Everyone not under the “insider” restrictions thought about buying back then and although most passed on it we’re all jealous of those who bellied up and doubled their money in five trading days - at least those that got out at $6 - we’re pointing and laughing at you greedy bastards for whom doubling your money in a week wasn’t good enough!  As WaMu plummets again to under $4 ($3.97 right now in after-hours trading) we know what will be the main discussion topic tomorrow.

So what has materially changed from July 9th when stock closed at $6 to July 14 when stock touched the $3.03 a share low; to yesterday when stock was trading above $6.25; to now as stock drops under $4?  Very little.  Let’s take a look at the big items:

• WM had earnings call.  Earnings were -$6.58/share vs the expected -$1.05/share but if you really look at what happened, $3.24 of the miss was an accounting hit due to TPG capital infusion, there were some sizable restructuring charges and rest of miss was due to an acceleration of the provision taken this quarter NOT (at least for now) a resizing of expected provision.  The single most important thing to come from the earnings call is that the top end range on the $190B mortgage portfolio is still $19B in losses.  That didn’t change with the larger Q2 provision. 
• We also know WaMu will not have a capital problem for the forseeable future with tangible ratio of 7.79%, tier 1 risk-weighted of 8.44%, a hefty $8.5B reserve on the balance sheet, and a strategy to shrink the balance sheet another $20B or so by year end freeing up an additional $1.1B in capital.  (damn, the WM treasurer needs a raise, he’s kicking ass for us!) So capital’s good.  How about a liquidity problem?
• IndyMac collapsed.  This may or may not play into the stock drop, but we don’t know since the moron analysts didn’t ask about WaMu’s deposit runoff post-IndyMac on the recent earnings call.  We know liquidity wasn’t even close to being a problem on June 30, and there hasn’t been an IndyMac, Northern Rock style run on WaMu since IndyMac collapse.  But even in this evening’s press release (commenting on a bogus analyst report) the media is quoting the June 30 liquidity number of $40B.  It’d be a lot nicer to know publicly what the liquidity number is as of mid/late July.
• WaMu ratings were reduced by S&P, DBRS and put on watch by Moody’s.  This certainly isn’t a good thing, but it’s not the bad thing it’s made out to be.  Providing the deposits hold, WaMu isn’t hard up for liquidity and so wouldn’t need to issue new debt.  So the ratings cut impact should be fairly limited.  Additionally (and I may be talking out of my ass here, but think I’m right) the ratings drops appear to be at holding company level not bank level, so collateral increases on assets pledged due to a ratings decrease shouldn’t be major since most assets are held in the bank.  (feel free to chime in if anyone knows more about this)

So if you agree with me that major fundamentals (credit, capital, liquidity) don’t appear to have changed (certainly not by factors of 50% and 200% driving the 50%/200% stock swing) then it would appear to be random stock market volatility swinging WaMu between $3 and $6 a share.  Which means buying at $4 isn’t necessarily a bad idea at all.  Provided you can stay liquid odds are WM will be back up at $6 sooner or later, and you can earn 50% on your money.  As Seattle’s favorite Oklahoman would say that’s a “sweet flip”.

If your time horizon is longer (18-36 months), try buying XLF the financial sector ETF.  It has all the upside of WaMu (holds many similar far oversold/beaten down financial stocks that will rebound) but comes without the company-specific risk of buying WaMu or any other single stock that may implode.  And if you really want to go nuts try RFL which tracks a similar financial index but leveraged to return 2x the index.

Just keep in mind stock investing is risky, WM right now is even riskier, and please try not to sue me if you buy at $4 and WM does go under or sells at a Bear-esque price to someone.  I’m no stock picking expert, nor did I stay at a Holiday Inn Express last night; I just post on a blog.

#1: Elevator Etiquette

Come on, be honest.  Is there anything that pisses you off more day-to-day than being stuck in the WaMu center elevator lobby bank at one of the busy periods - you know the times, when you can’t even get past the security gates to get into the elevator lobby.  Listening for five to ten minutes of people bitching about how long the elevators take, how it’s wasting “their time”, how they don’t understand why it takes so long, why can’t WaMu be more efficient,  etc, etc - and then watching those same people get on your elevator and hit the button for floor 19 when floors 20 and 21 are already hit (I’m using Marketing floors as an example because I can’t stand the way they spell whoo hoo in our ads, but this applies to all the three-floor internal-stair bundles and all the elevator banks).  Do these people not connect the dots that stopping on Every. Single. Floor. on the way up is directly correlated to the length of the wait in the lobby?  Do they seriously place more value on themselves not walking down/up a flight of internal stairs vs wasting 20 seconds of the lives everyone in that elevator and everyone down in the lobby?  Or are they completely oblivious to this?  Either way if these people constitute the employee pool at WaMu - are the recent earnings really that shocking? 

I even have no sympathy for instances where you’re going to floor 21 and the floor 19 button is hit and you now need to walk up two flights of internal stairs.  Seriously if you’re not on crutches, how hard is it to walk up or down some stairs?  And to be frank more than half of these people could use a little light cardio anyways.  Hell it’d probably even reduce our health insurance liability ever so slightly and be accretive to earnings.

Since it’s too late to rebuild the elevator banks and run them efficiently like the EET (or whatever that building on 3rd ave is called where you punch in your floor, and the system tells you which elevator to wait for) could someone in corporate property services PLEASE reprogram the elevators to only stop once every three-floor bundle.   So say if 20 is hit, someone wants to go to 21, the 20 becomes unlit and anyone trying to get off on those three floors would just have to walk down from 21.  This would free up a little incremental time for each and every person, get us all a little more in shape, and kill the dead time in the lobby.  And since we are a fair, caring, human and unprofitable institution we could even set aside one elevator per bank for the people who are unable to use the stairs, and that elevator could stop at Every. Single. Floor. on the way up.

If just one person reads this and decides to change their elevator habits, I will consider this entire blog venture a success.

• $5.9B loan loss provision this quarter?  Wow.  Even scarier, the residential provisioning model more or less assumed 20% frequency and 50% loss severity on outstanding residential pool.  This means - unless I’m missing something - 1 in 5 mortgages still in the portfolio will default and half the value of those mortgage will be lost.  Are you kidding me?  How were these loans ever approved in the first place??
• Those trends in the credit attachment sure don’t look good, and show NO signs of an inflection point.  How much money would you pay to see those charts in monthly not quarterly periods though?
• Anyone else chuckle when prepared remarks ran a full 45 minutes of the scheduled hour call?  At about minute 43 I had visions of Killinger going the entire hour without opening the floor to questions and was about to give him a CEO of the year award.  But even though he wussed out minute 45, it was nice to extend the call instead of screwing the analysts and only giving them 15 minutes of Q&A.
• I hear absolutely great things about John McMurray from everyone I talk to but he had a bit of a rough first few minutes on the call.   Anyone out there know if McMurray was involved on Countrywide earnings calls?  Even though it was an honest mixup, saying WaMu is seeing 100% loss severity on first-lien non performing loans is enough to give WaMu leadership and TPG investors a heart attack.  Saying it on an earnings call is even scarier.  Fortunately as we’ll discuss later it seems all of the WaMu analysts on the call were either a) asleep, b) high as study abroad students in an Amsterdam weed bar or c) shockingly compassionate about the mixup (very unlikely though given their behavior on prior calls).  McMurray recovered very nicely though on a later question showing a sense of humor explaining that he didn’t explain things clearly at all the first time.  He also really knew the credit numbers well and in my opinion dodged a question with the skill of a grizzled earnings call veteran on why second-lien loans are being carried as NPA’s vs charge-off even though he’d said earlier second-lien loans are seeing 100% loss severity.  Yes - why indeed?  All in all, we should look forward to hearing from him on future calls.
• My quick math on Tom Casey’s updated earnings drivers got to $4.5B of pretax, preprovision income.  Sounds good until you realize there’s already been $9B of provision through Q2 and unofficially I’d guess at least $5B more rest of the year.  So WaMu will have pretax net income of -$10B this year?  Yikes.  I’m not the smartest with tax laws, but at least they should get 40% of it back as a tax credit this year, or an asset to offset future earnings.
• Anyone else catch Kerry’s freudian slip when asked about his long-term vision for the company?  He stated a few objectives and then said “So we have, I think, a very clear plan for the next 18 … next period of time that we see to get back to the level of profitability that we should have.”  Sounds like KK is on an 18 month timetable to get the company back clicking on all cylinders.  I’m sure that’s not related at all to TPG being locked into their capital infusion for 18 months, then being able to sell a 1/18th stake for each month for months 19-36.  Good news is it sounds like WM will be independent for at least 18 months - provided credit doesn’t completely implode.  Though odds of WaMu being independent past 18 months looks a lot longer.
• Were all of the analysts hitting the bong before the call?  Was there seriously not a single question about Retail?  Only two about card and none on Commercial?  No questions on post-IndyMac deposit runoff?  No questions on how after placing all your eggs in the Retail segment basket you turn around and change retail presidents?
• And speaking of blazed-out analysts, did Louise Pitt of Goldman Sachs at the end of the call really ask if a pending Moody’s downgrade would lead to a cut in WaMu’s dividend?  Hello?!?  Do you realize dividend is only a penny/quarter now?  At a penny a share and ~2 billion common shares outstanding after the TPG capital infusion WaMu’s dividend runs $20MM a quarter.  If we’re ever to point where $20MM in capital will make or break WaMu’s capital/insolvency ratios there’ll be a lot bigger problems to worry about than discounted present value of a $20MM/qtr revenue stream.

Questions?  What did you think of the call?  What were your takeaways?

These usually proceed with precision of a Swiss timepiece.

1. Introduction by Alan Magleby IR maestro
2. Opening comments by Kerry noting the “unprecedented turmoil” of the current mortgage market.  (If the last four quarters have each been unprecedented, at what point does it become precedented though?)
3. A comment on how Home Loans had a very rough quarter and lost another chunk of money larger than the GDP of most Pacific Island countries (it has been a period of unprecedented turmoil after all), but that this latest turnaround plan is going to work and Home Loans will turn a profit in next 12 months (Project Restart is the latest of many turnaround plans - from my knowledge of the extremely limited scope of it though, I promise there will be a Project Reboot, Restore, Rescope or Resize next quarter).
4. A comment by Kerry that the other three segments are churning along nicely though and the “diversified revenue streams” from each segment will allow the company to see these unprecedented times through.
5. A very competent runthrough of financials by CFO Casey (I really do think we’re lucky to have him still at WM - and most of the analyst reports I’ve read agree on that).
6. Followed by the unveiling of the latest WM earnings drivers.  Now hopefully the second the call starts you were already skimming ahead in the prepared notes and running the drivers through your calculator to figure out what “the number” for this year will be, so when Tom gets to the drivers you’re a step ahead.  It is a very easy calculation to do and can add another level of fun to the call.  Two quarters ago I ran the numbers 30 seconds into call and realized WM was not scheduled to turn a profit while IR man Alan was still reading the disclaimers.  Kerry’s intro was that much more interesting once I knew that little tidbit…
7. Tom hands off back to Kerry to discuss some political/external issues,
8. And then at the bottom of the hour the fun begins with analyst questions.  Pay attention to Tom on these, he is like Michael Jordan in the mid-90’s on these questions.  The man never gets stumped, often corrects the analysts questions and knows every number by heart.  If asked to state WM exposure to loans in zipcode 90210, with a FICO under 700, that have reset in last six months, with two children in residence, and have a palm tree on left side of the driveway, Tom wouldn’t just know the answer he’d give them the splits between option ARM’s and regular ARMs - by memory.  The man is a beast and the analysts are as ineffective as Bryon Russell trying to trip up MJ in the Finals.  Just don’t ask Tom to provide NIM splits by month if you know what’s good for you.
9. Another fun item to watch is how many analyst questions Rotella jumps in to answer with the prepared talking points.  I’m not knocking him - it’s his job to hammer these home for the analysts, and he does it well, but it is absolutely hilarious.  You’ll know they’re talking points when he answers unrelated questions such as: credit card production per retail store and a question on subprime HELOC exposure with >75% the same answer.  What is especially funny is that the talking points will be unrelated to either question (did you know that WM has plenty of liquidity and capital?  And that our commercial segment had a kickass quarter?).  So loyal readers, keep score at home and as you see how many of these points will be hit on tomorrows earnings call ask yourself if they did or didn’t just replay the first 30 minutes from an earlier earnings call.

As of March 31 WaMu had $188B in total deposits with $152B in retail deposits and $46B in FDIC uninsured deposits (from the Thrift Financial Reports - enter in Washington Mutual, look in the “DI” Deposits report at lineitem DI210). 

That is a strong position but IndyMac also had decent liquidity on March 31.  After all that was over 135 days ago.  However earlier this week WM preannounced in a press release that as of June 30th they have $150B in retail deposits and more than $40B in “excess liquidity”. 

So deposits clearly hadn’t deteriorated noticeably as of June 30th (and remember Sen. Schumer’s letter that started IndyMac’s downfall was June 26).  $40B in excess liquidity and $46B in uninsured deposits sounds decent, ought to be able to cover a minor run on bank (if such a thing exists) but it certainly should cause a little alarm since there’s potential for disaster if things go wrong.  But let’s dig a little deeper.  With $188B in total deposits and $150B in retail/small business deposits, that leaves $38B in wholesale, escrow and brokered deposits which generally are a) much larger than retail on a per-account basis,  b) locked up for longer durations and c) deposited by more cool-headed customers than retail customers.  Conservatively assuming that 50% of these non-retail deposits are uninsured ($19B) and are unable/don’t see the need to liquidate in a bankrun, that leaves $27B in uninsured retail deposits with $40B in excess liquidity.  Is the heart-rate returning to normal now?  That would be a lot closer call than anyone would hope but WaMu would still be solvent even if all $27B in uninsured retail deposits left the bank.

But, Flash, you ask.  What about the customers who are insured but withdraw their money anyways?  And there’s the rub.  Despite fact that all insured IndyMac customers were unimpacted; they had their money available the next business day, their debit cards still work and their deposit interest rates haven’t changed, people would get caught up in a real WaMu deposit panic and yank their money out.  Many did with IndyMac though largely only after Sen Schumer released his letter on June 26 and the regular media started beating the IndyMac drum.  Honestly, how many times before they collapsed had you read stories like this, and read about IndyMac losing roughly 1% of deposits a day after June 26.

That distinct lack of deposit hysteria in the broad media about WaMu (if WaMu was losing 1% of deposits a day ($1.9B) you can be sure it’d be in every paper every day, and you can be even more sure Wells, Chase and B of A would be running ads encouraging WM customers to jump ship), along with other anecdotes such as the lack of a line at any WaMu store you enter (and it’s not just me), WaMu refusing to accept IndyMac cashiers checks with a reasonable hold-time (8 weeks are you kidding me?  Despite being backed by the Federal government?), and WaMu deposit rates roughly 0.5% below the market leaders in the West Coast states would seem to indicate that WaMu is not nearly as hard up for deposits as the blogosphere would have you believe; and accordingly, that the risk of everyday insured depositors fleeing WM is nowhere near as real as the message boards would have you believe.

On the flipside for the case against WaMu IndyMac itself was denying it was about to collapse 10 days before it did, there is a belief that WM is among the weaker banks around, and perception can be reality in financial crises (ask Jimmy Caine at Bear, or anyone in IndyMac’s executive suite).  Maybe that’s enough to trump the actual numbers stated above.  Only time will tell.

So what do you think?  What are odds WaMu is really having a bank run?  And for the record while I do work at WaMu, this is not an official blog and I am certainly not a WaMu apologist (read my other posts!!).  Feel free to post comments.  By virtue of reading my blog you are not only devilishly handsome with a rapier wit, but you clearly posses above average intellect so I can’t wait to hear your thoughts.

One is former Democratic presidential candidate.  The other is a preeminent capitalist.  But is it possible that Howard Dean and our CFO Tom Casey were separated at birth?  Take a look and try to tell yourself they’re not related. 

Which other WaMulians have a celebrity doppelganger?  When they make WaMu: The Movie who will play Kerry, Steve and the other execs? 

Imagine the preview with the deep voice movie guy: “in a world where crackwhores without incomes qualified for $700k option arms, only one man could stop the insanity” cue Howard Dean playing Tom Casey talking some jibberish about liquidity, defaults and covered bonds.

Maybe they could even then get Tom Casey to then play Howard Dean, as the head of a political party trying to force WaMu and other lenders to stop foreclosures, and maybe Jay Buhner could play Hank Paulson?

How could it not be a blockbuster?

For those of us with pieces of our net worth tied up in WaMu stock we also know all too well that that WaMu management was also caught offguard.  While perusing a recent 10Q I was reminded WM bought back $2.8B of stock in Q1 ‘07 at $45.55 a share at a time when we know they knew NPA’s were starting to climb.  In retrospect this was probably not the wisest allocation of capital.  I went back and tallied up all the share repurchases since 12/31/05 when talk of the housing bubble (and the resulting bubble pop) began to intensify.

Over that period WaMu repurchased $6.5B in stock at average price of $44.18.  Does the $6.5B number sound familiar?  It is fairly close to the $7B in stock sold to TPG & co at $8.75 a share this past April (I’m leaving out the $2.9B in preferred stock issued in December - a separate issue).  So in effect, Washington Mutual purchased 148 million shares for $6.5B (at $44.18/share); then realized less than a year later after the largest purchase, that we now would need the capital to survive, and turned around selling stock to get back $7B in capital (selling at $8.75/share).  By my math this transaction cost WaMu $35.43 a share, and works out to a $5B transfer of wealth from existing shareholders to TPG & co; simply by timing the market wrong and buying high/selling low. 

This is particularly galling on two counts: WaMu should have had among the top 5 best “inside information” and knowledge of the mortgage market by virtue of their market share, reams of data available to them to model potential losses, their internal historical data on mortgage servicing, etc - yet they completely misread the market.

Even more galling, with exception of Kerry being stripped of Chairman title and two board members leaving there have evidently been no ramifications for such a colossal screwjob to the shareholders.  I’m sorry but Ron Cathcart and James Corcoran were not the guys making the calls on balance sheet/capital management.  Unless TPG is playing a much stronger hand in the boardroom than I’m seeing at my level, and with peers in the bank I talk to, by all accounts the same people who made those capital mismanagement calls will be the ones making calls in the near future.  And with that thought I need to go drink. 

If anyone reading this blog was involved with the decisioning back in ‘06 and ‘07 to buy back shares I’d love to hear your side of the story and other considerations people were thinking back then.  Feel free to comment, or email me if you’d like to stay confidential.

I decided to start this website today after a particularly brutal week at work.  We all know WaMu is hurting right now and needs changes.  We also all know that Project Restart is a joke in how limited its scope was.  Impacts were somewhat noticeable in Treasury, on 15th floor and in parts of Home Loans, but come on … other than the Stockton move I’ve heard less than 15 people in Retail segment were let go?  Are you kidding me?  I came home and googled around for some additional WaMu discussions online and found a pretty sorry lot of messages here and here.  However in the later postings on this website I found what I was looking for.  Intelligent and informed conversation about WaMu, what’s working, what’s not.

My hope is this blog can be a place where lively, intelligent, informed opinions and insights about WaMu with a very healthy dose of cynicism and sarcasm (both strongly encouraged) can mix and entertain.  But believe it or not the ultimate goal is to better WaMu through fleshing out ideas, ways to improve, and exposing the flaws of our favorite company, all while staying civil and intelligent.  Sounds Pollyanish, but as long as there’s a little youthful optimism left in me, I’ll hope for the best.

Feel free to email me at flash@insidewamu.com - no information/opinion is too trivial.  I’ll try and post regularly for a few weeks and see what happens.  If it takes off, great.  If not then I guess there’s just not that big of a market in WaMu talk.  I’ll consider the blog a success if some of the discussions on here are implemented and WaMu becomes a better bank.

So here’s a couple topics to get started:

• WaMu needs to reduce employees dramatically.  It’s simply too big and bloated - particularly in the headquarters positions.  A smallish project Restart is not good enough.  Imagine if overnight every headquarters employee with a UID ending in an odd number was let go this weekend (or even number, whatever).  How would the bank function differently on Monday?  Think specifically about the team you’re on.  If you were down to 4 instead of 8, would the critical items required of your team to make the bank a success still get done?  Yes.  Would the BS projects, multiple Starbucks trips and “make busy” meetings with no purpose/action items and other non-value adding functions go away?  Yes.  Would it materially affect revenues?  No.  Would it materially affect expenses and resulting profits?  Absolutely.  In fact the remaining employees would probably be able to get sizable raises since company would no longer need to subsidize non-value adding employees ala Soviet Union in the 80’s.
• Related to above: What % of people that you deal with on a day-to-day basis add no value to the bank?  If you were in HR how would you devise a system to identify these people and get rid of them?  I have a couple ideas I’ll share over next few days because it’s clear that simple performance reviews don’t work when you have employees noses up their managers asses and other managers blindly obsessed with building FTE empires regardless of how their team performs.
• If you were Kerry for just one day what would be your #1 priority?
• Onto the lighter stuff: Do you believe Steve Rotella is a “sleeper agent” from Chase sent here to help lower the bid Chase will eventually need to buy us?  (I don’t buy this one, but love some of the conspiracy theories I’ve heard at work)
• And just how much $ does the Starbucks in the lobby make each day?  Is it the most profitable Starbucks store in the world?