FLASH: Right on schedule, toxic-loan king WaMu melts down, on verge of failure, announces massive write-off, office closures and layoffs

HP'ers knew this toxic lender was on its way to insolvency for some time, along with Countrywide, IndyMac, First Fed and many more. They called them "liar's loans" for a reason folks. The mortgage fraud self-enrichment paper promoted and endorsed by the on-their-way-to-jail bank execs at WaMu and more just simply ain't gettin' paid back. And now they and their shareholders, near-junk bond holders and account holders will pay the price.

Memo to WaMu account holders and bond holders - GET YOUR MONEY OUT OF THIS BANK AS FAST AS YOU CAN. WAMU IS THE US's NORTHERN ROCK. And we're still just getting started.

(yes, I'm still short WaMu via July 08 puts. I don't see how it survives)

Mortgage Crisis Forces Big Cuts at WaMu - Mortgage Problems Force WaMu to Close Offices, Slash Over 3,100 Jobs and Drop Subprime Loans

Washington Mutual Inc., the nation's largest savings and loan, said Monday problems in the mortgage and credit markets are forcing it to close offices, slash over 3,100 jobs, and set aside far more than expected for loan losses in its fourth quarter. The company also said it was slashing its dividend 73 percent.

It was all an illusion. And the lenders and homebuilders have to do whatever they can do to keep the illusion going. Otherwise they stop going.

Cramer had an interesting point on his freak-out on Friday. He recommended that companies like Bear Stearns, who are obviously imploding, should just remain quiet

"Just keep your mouth shut during this period - don't say a thing" he said.

Some companies, like IndyMac and Countrywide, are trying the opposite tact - talking aggressively and confidently on how they're well-positioned for the downfall, how they'll gain share as all their competition goes belly-up, how they have great liquidity and funding and business models, blah blah blah.

In the case of Countrywide, that talk is actually corrupt, as their orange CEO desperately dumps $118 Million in shares as fast as he could while the company at his direction was buying back shares to try to hold the price up for him (unsuccessfully).

So why the lies? Why the aggressive spin?

Because they're scared. They're scared because they know that this whole Ponzi Scheme is now dominoing. And if they show any sign of trouble or weakness publicly, they can get American Home Mortgaged out of business right quick.

Then you have Loan Center of California, which is hilariously and stupidly trying to sue anyone who talk bad about them, or expose the truth.

In the end, none of their spin and blather will matter. Funding lines will get yanked. Toxic loans will get recalled. Market demand for buying junk loans is at zero. Business models will have gone kaput. And hundreds of thousands of REIC will be on the streets, box and plant in hand, unable to make their own mortgage payments.

It's over folks. It's all over. Don't listen to REIC lies. Don't listen to realtors on commission. Don't listen to the Investment Banks. Don't listen to homebuilders who call bottom. And especially don't listen to the liars at the NAR.

It's over.

And all of us here saw it coming. Almost all of us.

Neither a borrower nor a lender be... Have truer words ever been spoken? Just look around you today - both sides of this equation suck.

Neither a borrower nor a lender be;
For loan oft loses both itself and friend,
And borrowing dulls the edge of
husbandry.

- Polonius, from Hamlet by William Shakespeare

Here's your subprime and second-lien death-list for anyone keeping score at home

Got your popcorn? When doing your research, note which companies are bag-holders in addition to issuers. Wells Fargo for instance sells their junk as fast as they can to Wall Street firms, who then sell it off to who-knows-where (hedge funds, China, etc).

It's the bag-holders that get killed on this grand game of duck-duck-goose. Goose!