I really hope they don’t blow their last chance, with the stock still up 90% from the low last month. It would really hurt to be where Washington Mutual is right now. These banks remind me of microcaps I’ve seen, where shareholders get diluted 5:1 just so the company can raise a few months of burn (analogous to writedowns in this case). But Wachovia’s market cap is still $31 billion. That’s good money likely to go poof when this bounce is over, so they had better act fast.

Source: Yahoo! Finance

Here’s WaMu. Not much of a bounce, from three to four dollars. I don’t know what they’re going to do with a market cap of just $7 billion:

Source: Yahoo! Finance

If I were CEO Robert Steel I’d be on the phone every day to Dubai and Singapore begging for money. No scratch that, I’d fly out there and beg in person for as much cash as I could get at whatever price it took, even if it were $4.00. Better a 70% discount from $15 than $4. I’ve seen this happen over and over again with microcaps, when a CEO thinks his company’s troubles are temporary and tries hold out for better terms. But the longer they hold out, the further the stock slips, and before they know it they’re signing over 90% of the company plus a ratchet provision to some New Jersey fund with a history of SEC violations for a couple of million bucks.

These are just two of many huge lenders who cannot lend: welcome to deflationary depression of the 2000s.