Washington Mutual troubles mount

Washington Mutual shares tumbled after the largest US savings and loan company projected another big write-down for soured loans and was downgraded to "junk" status by leading credit rating agency Moody's. At least four analysts cut their price targets for the thrift, though Goldman Sachs raised its rating to "neutral" from "sell." Washington Mutual released third-quarter projections six weeks early and said it had ample liquidity. The thrift has said losses from home loans could reach US $19bn through 2011. But Moody's lowered Washington Mutual to below investment-grade status, citing reduced financial flexibility, deteriorating asset quality, and expected franchise erosion. Fitch also downgraded the thrift. Washington Mutual ousted CEO Kerry Killinger, who failed to halt losses on home loans that already total US$6.3bn. New CEO Alan Fishman may have to shed 2,300 branches that hold US$143bn in deposits.