A Washington Mutual brokerage unit may be planning to exit the MBS business, according to a published report in the New York Post on Thursday. Citing insider sources, the Post says that WaMu Capital Corp. is "pulling the plug Dec. 10 on its attempt to be a player in the MBS markets." From the story:
A victim of the sustained collapse in the mortgage markets, WaMu Capital will reduce its headcount to between 10 and 20 people from 125. In September, the bank dismissed 100 traders, sales personnel and support staff. The closure appears to have been coming for the past few weeks. Since early November, WaMu Capital was not providing repurchase agreements and in many cases, did not provide even basic bids and offers for bonds it had sold, according to hedge fund portfolio managers.