B of A singing homebuilder blues; WAMU free-falling

News item from Bloomberg: "Bank of America, the biggest U.S. consumer bank, said credit weakness is spreading to commercial borrowers from residential customers and loan losses probably will deepen in the third quarter."

Calculated Risk has the B of A presentation and webcast. More from Bloomberg:

Home builders unable to repay their loans are contributing to deterioration among commercial borrowers, said Brian Moynihan, head of the global corporate and investment banking unit, at a New York conference today. More than half the Charlotte, North Carolina-based bank's $13.4 billion in loans to builders are considered troubled, 19 percent are not paying interest and losses are likely to mount, Moynihan said.

Also: Washington Mutual shares are still free-falling. Shares were down 22%, at $2.59, at 10:50 a.m. LA time this morning. That's an 18-year low if you are keeping track. WAMU shares lost 20% yesterday.

Math quiz: If a stock declines 20% every day, how long does it take to get to zero? Answer: It never gets there, but it gets awfully cheap.

--Peter Viles

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Comments

[MyLessThanPrimeBeef]

Peter Viles caught as a crypto-atheist.

The answer to Zeno's paradox is not 'it never gets there,' unless you wish to deny the existence of infinity, and as any devout Hindu would tell you, that's where God resides, or perhaps He IS infinity (it's all too much for me to comprehend).

[sheila]

north carolina was, if i recall correctly, one of the only "holdouts" that claimed to have escaped the bubble and it's deflation. looks like they are late to the party, but have finally arrived, mostly to the deflation part?

[Jimmie]

If I remember my infinite sequences correctly, 20% down each day would eventually reach zero as you go to infinite. It's been a while with my math though :(