WAMU: It’s a “near perfect storm”

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Good morning, Sebastian Junger. You ought to be collecting royalties every time someone trots out the old ‘perfect storm’ phrase you coined.

The latest to borrow it is the CEO of Washington Mutual: ‘Washington Mutual, the largest U.S. savings and loan, may set aside $500 million more than it had previously forecast for loan losses in 2007, amid what Chief Executive Kerry Killinger on Monday called a ‘near perfect storm’ in U.S. housing.

More, from Reuters: ‘’Most housing markets appear to be weakening,’ Killinger said at a Lehman Bros. conference. ‘We would not be surprised to see declines in housing prices in many regions of the country ... for the next few quarters.’’

Our take: Beyond the serious news here, we’re tired of the use of ‘perfect storm’ as America’s Favorite Excuse for Everything That Goes Wrong. Somewhere in an American school today, some kid is claiming he didn’t do his homework because there was a ‘perfect storm’ of unforeseen, uncontrollable events over the weekend.

The ‘perfect storm’ Junger wrote about was a combination of bad timing, bad luck and bad weather -- three weather patterns colliding in a way no one expected. The housing slump we’re in has nothing to do with bad weather, bad timing or bad luck. An orgy of easy money and bad underwriting drove housing prices to artificially high levels. Now it’s unwinding, and it’s ugly.