(updated with analyst comments on WaMu) Justified or not, investor fear is a palpable thing these days -- just ask Fannie Mae (FNM) and Freddie Mac (FRE). The latest mortgage financial-led firm to see its shares whipsaw Thursday was Washington Mutual (WM), which had seen its share of investor concern prior to Thursday's sell-off; shares in the Seattle-based lender closed off 13.3 percent at $4.03 over fresh liquidity concerns. A report from Gimme Credit LLC analyst Kathleen Shanley Thursday morning suggested that WaMu's creditors were quietly "pulling funds" from the bank -- leading equity investors to do the same, even if some market insiders found the report lacking credibility. "We won't use the phrase 'run on the bank,' but we would be remiss if we did not observe that many creditors have quietly been pulling funds," wrote Shanley, according to a Bloomberg News report. "For example, Fed funds purchased and commercial paper declined to $75 million at 6/30/08, down from $2.0 billion at year-end and $3.4 billion a year ago," she said. "Securities sold under agreements to repurchase are down to $214 million, from $4.1 billion and $9.4 billion for the year-end and prior-year, respectively." Cue the latest round of investor panic, even if under questionable cover. "It looks like WM undid its own reliance on short-term borrowing 5 months ago to avoid dependence on hot money," said one analyst that emailed HW. "It converted short-term debt to long-term debt. "That's a good thing, right?" Not in this topsy-turvey market, apparently. The Dow closed Thursday at 11,349.28 -- off 283.10, or 2.43 percent, on the day. Reuters reported that in the CDS market, credit protection sellers began requesting that contracts involving WaMu be paid on a so-called "up-front" basis -- a move usually reserved when investors perceive a default as a given at some point in the future. And frogs started falling from the sky in certain parts of New York, as well. OK, so we made that last part up. But suffice to say that investor jitters over housing and credit have yet to dissipate, despite a three day mini-rally that had some wondering if the worst might really be behind us. Fitch Ratings didn't help matters, either, releasing an update to its RMBS new issue criteria that suggested the rating agency is expected a 25 percent drop in real housing prices nationally over the course of the next five years. See earlier HW report here. For its part, Washington Mutual was forced to remind investors in an after-market-close statement -- its second such statement in two weeks -- that it does not rely on commercial paper to fund its banking operations. At the end of June, WaMu had more than $40 billion in liquidity, or access to cash and other assets that can be easily converted to cash, it said. Looking at deposit activity in the second quarter, it's worth noting that WaMu saw total deposits drop $6.13 billion between the end of March and the end of June to $181.9 billion in total, with $3.4 billion of that total drop coming out of retail deposits. Total deposits are roughly 10 percent below year-ago levels, as well; and while overall deposits are falling, brokered deposits are rising. WaMu reported $19.3 billion in consumer brokered deposits at the end of Q2, up $1.5 billion from one quarter earlier. Disclosure: The author was long FRE, and held no positions in FNM or WM when this story was published; indirect holdings may exist, however, via mutual fund investments. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.