Tuesday, December 09, 2003

Housing boom about to go bust?

Shares of home builders tanked on Tuesday after Washington Mutual Inc., the No. 3 U.S. mortgage lender, cut its earnings outlook and said it would slash 2,900 jobs early next year, analysts said.

Although analysts said it was unclear whether the savings and loan company's business slowdown was due to a drop in mortgage lending or refinancing, the disappointing news was enough to help throw investors in home builders off balance.

"It seems to be a combination of that and (trading) ahead of the Fed's move," Natexis Bleichroeder analyst Barbara Allen said earlier in the day.

However, even after the Federal Reserve said it would hold interest rates at 45-year lows, housing stocks continued to trade lower....


I guess those 2,900 people who worked for Washington Mutual through the huge wave of refinancings were just temps. Too bad they probably didn't know that.

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