Forbes is reporting . Up to 19,000 employees of Washington Mutual face being laid off this weekend as JPMorgan Chase turns up the synergy on its recent acquisition. On Friday, JPMorgan Chase (JPM) said it expects to retain the 22,000 employees who work at Washington Mutual branches and 2,000 workers in the mortgage and wealth management divisions in California, spokesman Tom Kelly told Forbes.com. The company has not yet determined the total numbers to be cut in other states, but it planning to inform all former WaMu employees of their job status by Monday. WaMu had about 43,000 employees as of June, according to a filing with the Securities and Exchange Commission. Combined, Chase and WaMu have about 5,400 branches. The company said it only plans to close about 10.0%. The bulk of the job cuts will be at the Washington Mutual headquarters in Seattle due to the overlap in operations with the current employees at JPMorgan. Merger Synergizing Expect to see more synergizing from all mergers we have seen. Here is a list of synergy discussions now doubt underway. JP Morgan and Washington Mutual Bank of America and Countrywide Financial Bank of America and Merrill Lynch JP Morgan and Bear Stearns Wachovia and Wells Fargo More Synergizing Coming Still more synergy will come from hundreds of regional banks that have not yet gone under but will as the The Federal Deposit Insurance Corp. said Tuesday the list of banks it considers to be in trouble shot up nearly 50 percent to 171 during the third quarter -- yet another sign of escalating problems among the institutions controlling Americans' deposits. The 171 banks on the FDIC's "problem list" encompass only about 2 percent of the nearly 8,500 FDIC-insured institutions. Still, the increase from 117 in the second quarter is sharp, and the current tally is the highest since late 1995. Banks that don't make the list can end up collapsing anyway -- the two biggest bank failures over the past year, Washington Mutual...

"Conditions have deteriorated on a scale and with a speed that no one could have predicted just a few months ago. Market conditions of unprecedented strength are roiling the world's financial markets. The global economy is either in, or close to, recession and 2009 is not likely to be a year of great recovery." Brett White, president and chief executive officer of CB Richard Ellis, recent letter to clients, from the LA Times: And a few months ago White wasn't exactly optimistic: “Decreased investment volumes have now become evident in all parts of the world. ... I can best describe the current environment as being very challenging and still having a high probability of getting worse before we see improvement." Brett White, president and chief executive officer of CB Richard Ellis,

“What came together was not only a cyclical undervaluing of risk [but also] a housing bubble, and triple-A ratings were misguided. There was virtually nobody who saw that low-probability event as a possibility.” > With that line, former Treasury Secretary Robert Rubin, and current Citibank board member, shredded what little reputation he had left. Rubin’s attempts at defending his tenure at Citi struck me as totally disingenuous. While some may uncritically accept that nonsense as fact, we know better. Many people had been warning of housing busts, excess credit creation, and derivatives for quite some time. Quite a few people were discussing this. Warren Buffett had warned about derivatives years prior. Even Merrill Lynch, and their savvy chief economist David Rosenberg, noted in August of 2004 the potential damage the housing and credit boom and bust could cause. Rubin blamed financial system, not any errors of his own at Citi. And his defense of Greenspan is, in my opinion, the work of a guilty conscious. He and Greenie both supported, and even pushed for: • Repeal of Glass Steagall • Exempting of Derivatives from Regulation • Encouraging Citi to take on more leverage in 2004 • Ultra-low interest rates during, and after the 2001 recession All of these are factors directly related to the subsequent leverage boom and bust. Here’s part of the piece: “Mr. Rubin, senior counselor and a director at Citigroup, acknowledged that he was involved in a board decision to ramp up risk-taking in 2004 and 2005, even though he was warning publicly that investors were taking too much risk. He said if executives had executed the plan properly, the bank’s losses would have been less. Its troubles have put the former Treasury secretary in the awkward position of having to justify $115 million in pay since 1999, excluding stock options, while explaining Citigroup’s $20 billion in losses over the past year and a government bailout of at least $45 billion… Since 1999, the bank has lurched...

submits: The top chart above (click to enlarge) shows the OFHEO House Price Indexes for , , and , just recently updated through the third quarter 2008.

This is in three parts (each part 10 minutes). The other .

WASHINGTON -- Black Friday's retail shoppers hunting for holiday bargains won't be enough to stave off what's likely to become the next economic crisis. Malls from Michigan to Georgia are entering foreclosure, commercial victims of the same events poisoning the housing market.

Student advocacy groups are urging the Treasury Department to prevent a new $200 billion consumer-lending program from benefiting private student lenders, which they say are largely unregulated and prey on students with risky, high-interest loans.

Federal authorities this week announced a series of arrests and convictions in connection with a global identity theft ring that stole millions of dollars by hijacking home-equity lines of credit issued to thousands of consumers.

submits: Vikram Pandit was on Charlie Rose last night, and was asked point-blank whether there was a run on Citi's deposits last week. Here's the exchange, at around the 10:40 mark: Charlie Rose : So you go to them and decide that we need to do something because there's a loss of confidence, maybe people were taking their deposits out. Were there? Was it a significant run, in terms of deposits?

The Census Bureau , New Home Sales in October were at a seasonally adjusted annual rate of 433 thousand. This is the lowest sales rate since 1982. Click on graph for larger image in new window. The first graph shows monthly new home sales (NSA - Not Seasonally Adjusted). Notice the Red columns for 2008. This is the lowest sales for October since 1981. (NSA, 34 thousand new homes were sold in October 2008, 29 thousand were sold in October 1981). As the graph indicates, sales in 2008 are substantially worse than the previous years. The second graph shows New Home Sales vs. recessions for the last 45 years. New Home sales have fallen off a cliff. Sales of new one-family houses in October 2008 were at a seasonally adjusted annual rate of 433,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 5.3 percent below the revised September of 457,000 and is 40.1 percent below the October 2007 estimate of 723,000. And one more long term graph - this one for New Home Months of Supply. "Months of supply" is at 11.1 months. Sales are falling quickly, but inventory is declining too, so the months of supply is slightly lower than the peak of 11.4 months in August 2008. The all time high for Months of Supply was 11.6 months in April 1980. And on inventory: The seasonally adjusted estimate of new houses for sale at the end of October was 381,000. This represents a supply of 11.1 months at the current sales rate. Inventory numbers from the Census Bureau do not include cancellations and cancellations are falling, but are still near record levels. Note that new home inventory does not include many condos (especially high rise condos), and areas with significant condo construction will have much higher inventory levels. This is a another very weak report. I'll have more later today ...

Oppenheimer Banking seeress Meredith Whitney has more lumps of holiday coal for the banking industry. She's projecting that the U.S. banks, including Citigroup, could see another $44 billion in writedowns and charges in the fourth quarter. Accounting rule changes on...

submits: There are few times in life when one can say with authority that they were ahead of the curve — I mean, really, really ahead of it. But the reason so many of you read HousingWire today is because this blog-turned-news agency was among the first to call the global fallout from quickly souring mortgages. We weren’t alone, of course — Nouriel Roubini, in particular, comes to mind, as does the retired executive that pens the well-read — but we were clearly among the first to focus so intently on the interplay between the primary and secondary mortgage markets. I still remember as far back as Dec. 2006 arguing that the failure of the capital markets would portend a grave crisis for the nation’s economy.

Fitch Ratings and Standar & Poors (S&P) Ratings services both published their methodology and assumptions for evaluating residential mortgage-backed securities (RMBS) in November. Look for both services to issue updated ratings over the next few weeks. Fitch Ratings has revised its surveillance methodology for U.S. sub-prime RMBS to reflect increased emphasis on ResiLogic, their loan-level and loss model. Going forward, ResiLogic will be used to guide collateral loss projections by estimating the frequency of foreclosure for all mortgage pools regardless of seasoning and the loss severity of pools seasoned less than 30 months. For pools seasoned more than 30 months, Fitch believes actual loss severity trends exhibited by the pools are the best indicator of future severity trends. This loan-level analysis will be used in conjunction with Fitch’s existing break loss analysis to determine each bond’s loss coverage ratio. The ResiLogic stressed mortgage pool loss scenarios will also be used in determining targeted loss multiples at each rating category resulting in pool-specific category thresholds as opposed to using a static set of thresholds. Other adjustments to the methodology include: An adjustment to the ResiLogic derived default rates for performing loans to account for the actual performance of each transaction relative to original expectations. The use of historical loan-level loss severities on seasoned (greater than 30 months) pools. Fitch is reviewing its rated transactions for 2005, 2006 and 2007 and will be releasing revised ratings soon. The current revised cumulative loss expectations for these years are 12 percent, 27 percent and 31 percent respectively. The Updated Surveillance Criteria for U.S. Subprime RMBS are available online at . Standard & Poor’s Rating Services also recently published the methodology and assumptions fo rating U.S. RMBS backed by non-performing or re-performing mortgage loans. Given the current market conditions and the...

The European Union proposes a 200 billion euro ($260 billion) effort that would see member states coordinate attempts to provide a fiscal jolt to the region’s stagnating and shrinking economies.

submits: More Institutions Report Declining Earnings, Quarterly Losses: Troubled assets continued to mount at insured commercial banks and savings institutions in the third quarter of 2008, placing a growing burden on industry earnings. Expenses for credit losses topped $50 billion for a second consecutive quarter, absorbing one-third of the industry’s net operating revenue (net interest income plus total noninterest income). Third quarter net income totaled $1.7 billion, a decline of $27.0 billion (94.0 percent) from the third quarter of 2007.

WASHINGTON (Reuters) - Banks on Tuesday pleaded with regulators to immediately clarify fair value accounting rules and said failure to do so would negate the government's efforts to shore up the financial sector.

SAN FRANCISCO (MarketWatch) -- Bank loan losses surged during the third quarter but the reserves set aside for future problems didn't keep up, the Federal Deposit Insurance Corp. said on Tuesday.

Posted By: You can tell that Countrywide is under new management. It invited me in. Many blame Countrywide for the easy-money mortgages which led to the housing bust. Topics: Companies: | MEDIA: |

From a Newsweek interview: NEWSWEEK: What are your thoughts on the team Obama assembled? Nouriel Roubini: The choices are excellent. Tim Geithner is going to be a pragmatic, thoughtful and great leader for the Treasury. He has experience at the Treasury and the IMF [International Monetary Fund], then the New York Fed. I have great respect for both Geithner as well as Larry Summers. I think both of them in top roles in economics in the administration were good moves. I think very highly of them both. Roubini adds on his : First, I told the Newsweek reporter – as full disclosure – that I had worked for Tim Geithner and Larry Summers when they were both at Treasury: I was head of a Treasury Office and the Senior Advisor to Tim Geithner in 1999-2000 who was at that time the Under Secretary for International Affairs while Larry Summers was Treasury Secretary. So some may [believe] that my positive views of the two may be biased/tinted by my working for them; on the other hand I know first hand about them and I have the greatest respect for their skills, intelligence, expertise, commitment to sound public policy and policy wisdom even if I may not always agree with all of their views. Second, I have also to add that ... while I have the greatest respect for the new Obama economic team, they will inherit a huge economic and financial mess that will be extremely hard to fix even if they were to implement the most sound and consistent economic and financial policy package. This is going to be the worst US recession in decades as the strapped US consumer is now faltering. ... What policy can do – at best – is to minimize the financial and economic losses and limit the extent and severity and length of the economic and financial crisis, not to prevent it. President Elect Obama and his top notch team will inherit two wars and the worst economic and financial crisis in decades.