WaMu Fails

[frerottenextelway]

http://www.nytimes.com/2008/09/26/business/26wamu.html

Washington Mutual, the giant lender that came to symbolize the excesses of the mortgage boom, was seized by federal regulators on Thursday night in the largest bank failure in American history.

Regulators simultaneously brokered an emergency sale of virtually all of Washington Mutual to JPMorgan Chase. The remainder of WaMu, the nation’s largest savings and loan, will be operated by the government. Shareholders and some bondholders will be wiped out. WaMu deposits are guaranteed by the Federal Deposit Insurance Corporation up to the $100,000 limit for each account. WaMu customers are unlikely to be affected.

Lets here it for the unregulated free market.

[baja]

The rain of cleansing has become obvious to all now.

[Dudeskey]

burn baby burn...™

[theAPAOps5]

**** by the time the politicians can come to an accord on their pork barreling and special interest add ons for the bailout it will be too late.

[frerottenextelway]

**** by the time the politicians can come to an accord on their pork barreling and special interest add ons for the bailout it will be too late.

The death of the bailout really has nothing to do with pork or special interest. Thank God the fundamentals are strong though.

[baja]

The perfect storm has begun.....

[theAPAOps5]

The death of the bailout really has nothing to do with pork or special interest. Thank God the fundamentals are strong though.

I know it was tongue in cheek.

[baja]

Not going to be boring anymore.

[frerottenextelway]

I know it was tongue in cheek.

Oh. I lose to the internet. :thumbs:

[L.A. BRONCOS FAN]

The big fish are gobbling up the few medium-size fish who remain in the pond.

The consolidation/concentration of power/wealth crusaders are nearing the finish line.

BushCo = Hoover 2.0

[Rohirrim]

All my banking, mortgage, some stock, etc. are in Chase. Lookin' good. :thumbs:

[baja]

All my banking, mortgage, some stock, etc. are in Chase. Lookin' good. :thumbs:

Dude you are too smart to feel smug in the mist of these uncharted waters and I know you know that.

[kappys]

The big fish are gobbling up the few medium-size fish who remain in the pond.

The consolidation/concentration of power/wealth crusaders are nearing the finish line.

BushCo = Hoover 2.0

I remember listening to a lecturer a few months ago who commented on a story about how the widening economic gap which focused on the envy of the very wealthy with regards to the increasing wealth of the super wealthy.

[L.A. BRONCOS FAN]

I remember listening to a lecturer a few months ago who commented on a story about how the widening economic gap which focused on the envy of the very wealthy with regards to the increasing wealth of the super wealthy.

Unregulated capitalism always ends up with the biggest fish in the pond gobbling up all of the small and medium-sized fish.

We saw it in the business sector with Wal-Mart, and now we're seeing it in the financial sector with this latest shakedown.

But the minute you suggest we need regulations to protect our economy from "Enronization," then right-wing straw man artists like W*GS start screaming "socialism!"

[snowspot66]

.

[Drek]

The big fish are gobbling up the few medium-size fish who remain in the pond.

The consolidation/concentration of power/wealth crusaders are nearing the finish line.

BushCo = Hoover 2.0

Its really amazing how he's managed to shoehorn all the corruption and financial maleficence of the Harding and Hoover administrations in a single shot.

I still think he's more Harding, with McCain as his little Hoover running around saying "the fundamentals of our economy are strong!" over and over again.

[El Guapo]

WaMu customers are unlikely to be affected.

I hope so, I bank there. :drown:

[frerottenextelway]

I hope so, I bank there. :drown:

No you don't, you used to. JP is your bank now. :(

[L.A. BRONCOS FAN]

No you don't, you used to. JP is your bank now. :(

I wonder if the new automated greeting will be "good day, comrade" when he calls to see if his money is still there? ;)

Welcome to the Corporate Socialist Republic of America. :welcome:

[alkemical]

burn baby burn...™

en fuego!!!!

I'm trying to get ready for Meximericanada!

[L.A. BRONCOS FAN]

en fuego!!!!

I'm trying to get ready for Meximericanada!

What's the dollar/Amero exchange rate looking like? ;)

[baja]

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[alkemical]

What's the dollar/Amero exchange rate looking like? ;)

Ya know - it's funny - in my...imagination - i could so see this:

The "illuminati" create a crisis, the econ fails, thus the meximericanada appears with the euro.

ya, it's far fetched and ya - it sounds silly..... (to some)

But man, the more and more **** goes on...it really seems that way...

Thing is, i'd LOVE to be wrong. But i'm wondering if reality is sharing my POV at times...

[L.A. BRONCOS FAN]

Ya know - it's funny - in my...imagination - i could so see this:

The "illuminati" create a crisis, the econ fails, thus the meximericanada appears with the euro.

ya, it's far fetched and ya - it sounds silly..... (to some)

But man, the more and more **** goes on...it really seems that way...

Thing is, i'd LOVE to be wrong. But i'm wondering if reality is sharing my POV at times...

It's not all that far-fetched when you remember how past market crashes were engineered by the international bankers at the top of the food chain.

And isn't the timing of this current crisis interesting?

The October surprise came a few days early, apparently.

[Hotrod]

It's not all that far-fetched when you remember how past market crashes were engineered by the international bankers at the top of the food chain.

And isn't the timing of this current crisis interesting?

The October surprise came a few days early, apparently.

A real October surprise (major terrorist attack) would bring us to our knees right now. :nono:

[alkemical]

A real October surprise (major terrorist attack) would bring us to our knees right now. :nono:

Question Hotrod:

If a terrorist attack happens...with in this time frame....

How would you feel, view, react to it....

[Hotrod]

Question Hotrod:

If a terrorist attack happens...with in this time frame....

How would you feel, view, react to it....

Depends on the size/scale. At this point if a large event happened me and my son would take a vacation to our cabin and watch from there.

[alkemical]

Depends on the size/scale. At this point if a large event happened me and my son would take a vacation to our cabin and watch from there.

Would you trust that it was...as you heard it in the news....

[Rohirrim]

A real October surprise (major terrorist attack) would bring us to our knees right now. :nono:

Hopefully, we're a little tougher than that.

[alkemical]

Hopefully, we're a little tougher than that.

Do you believe it to be so, Ro~?

[Rohirrim]

Do you believe it to be so, Ro~?

I can only speak for myself. The best way to handle terrorist attacks is to do what the Israelis and Brits do. Mourn your dead. Clean up the mess. Go on with your lives. Track down and exterminate the cockroaches.

[L.A. BRONCOS FAN]

A real October surprise (major terrorist attack) would bring us to our knees right now. :nono:

Bush and his buddy Paulson are probably hoping that warnings about economic "mushroom clouds" will have the same effect, i.e., serve to rush us into a bail-out agreement that favors their Wall Street puppet masters and gives the finger to the rest of us.

[Hotrod]

Hopefully, we're a little tougher than that.

I dont mean it would destroy us but it would be the worst possible timeing.

[davidtkd]

I think I just threw up a little.
http://www.foxnews.com/story/0,2933,428641,00.html

[Hotrod]

I think I just threw up a little.
http://www.foxnews.com/story/0,2933,428641,00.html

What the flying **** is that ****

[Denver Crush]

I keep telling all my family and friends..."Well, at least it will be exciting!"

[elsid13]

The more I learn about this crap, it real come down to freaking bank deregulation that allowed the mega-banks to be created. ****ing Wachovia (my bank because it bought out the state bank I used to go through) is in talks with Wells Fargo and Citi about a merger.

The reason for Wachovia's trouble; the purchase of bank in California that specialized in mortgages. Worst ****ing purchase ever. Good news Wachovia has more assets on hand and isn't as exposed as WAMU, but still a ****ing joke. Wachovia really and it stock holdes would benefit for the Deal Purchase of Securities.

Ironically, the small local banks and credit union are better position to get through this then the mega banks because the focused on thier core business and didn't get involved in mortgage backed securities

[Bronco Bob]

I think I just threw up a little.
http://www.foxnews.com/story/0,2933,428641,00.html

These are the folks that John McCain wants to give permanent tax cuts to.

[baja]

Bank of Earth - the one and only world bank

Our motto;

Deal with us or Die!

[baja]

We are being hosed and the pressure has been turned up to fire hose quality.

It's coming from all directions will the sickness be coming soon.

Perfect storm baby

No matter what we do we are playing into their hands now

Shoulda listened to Ron Paul

[alkemical]

I think I just threw up a little.
http://www.foxnews.com/story/0,2933,428641,00.html

I love it when people tell me that only Gov't jobs reward failure.

[BroncoBuff]

This is so so terrible ... I live 5 blocks from WaMu corporate HQ, and there are several people in my building who work there. This is very, very, very painful here ... several thousand jobs are in jeopardy here. The local TV stations were having WaMu news updates at the bottom of every hour the last couple weeks. WaMu was a jewel in the Seattle business community, so this is real jolt. A 10 on the Richter scale.

The sad part is that it was actually looking like they were gonna save the store and muddle through about a week ago. Then the "bailout" news hit the fan, and dumasses all over the country started withdrawing their funds. Despite the FDIC insurance, dumasses withdrew million and millions, and that was too much to overcome.

[alkemical]

This is so so terrible ... I live 5 blocks from WaMu corporate HQ, and there are several people in my building who work there. This is very, very, very painful here ... several thousand jobs are in jeopardy here. The local TV stations were having WaMu news updates at the bottom of every hour the last couple weeks. WaMu was a jewel in the Seattle business community, so this is real jolt. A 10 on the Richter scale.

The sad part is that it was actually looking like they were gonna save the store and muddle through about a week ago. Then the "bailout" news hit the fan, and dumasses all over the country started withdrawing their funds. Despite the FDIC insurance, dumasses withdrew million and millions, and that was too much to overcome.

I almost had a job in the IT building downtown.

[BroncoBuff]

They tried their arses off to save the thing...

WaMu's desperate last days


http://seattletimes.nwsource.com/art/ui/navbrdr_rt.gif
http://seattletimes.nwsource.com/ABPub/2008/09/25/2008186946.jpg (http://seattletimes.nwsource.com/ABPub/zoom/html/2008210321.html)
http://seattletimes.nwsource.com/art/ui/zoom_photo.gif (http://seattletimes.nwsource.com/ABPub/zoom/html/2008210321.html) ROBERT GIROUX / GETTY IMAGES

By Drew DeSilver
Seattle Times business reporter

An old-fashioned run on the bank — conducted electronically rather than with customers lined up around the block — was the final blow that brought Washington Mutual's 119-year history to an ignominious end. With depositors fleeing, the FDIC decided to pull the plug on the thrift even as its management rushed to find a way to stay alive, insiders say.

Federal regulators say WaMu became unsound after customers withdrew $16.7 billion starting Sept. 16, during a seesaw week that ended with the U.S. government's proposed $700 billion bailout of financial institutions. WaMu shares plummeted 60 percent this week before the Federal Deposit Insurance Corp. stepped in..

But leading up to Thursday's seizure of the Seattle-based thrift — the largest bank failure in U.S. history — were three weeks of feverish behind-the-scenes maneuvering, as players with conflicting agendas circled over the reeling but still potentially valuable company.

Federal regulators wanted to avoid a collapse that would severely strain the nation's deposit-insurance system. The big-name investors who'd pumped billions into WaMu just months ago sought to salvage something from their ill-timed intervention. And the half-dozen banks hovering over WaMu saw a grand opportunity but wanted to pay as little as possible.

Before it was over, regulators would hold a secret auction behind the backs of WaMu management and seal a deal the company was powerless to oppose.
Regulators and insiders paint a picture of a deeply troubled bank that only reluctantly put itself up for sale, though they dispute how close it was to failing.

In early September, the board hired Alan Fishman, a veteran banking executive from New York, with a mandate to get WaMu turned around and then, once the crisis had passed, look for a buyer.

But federal regulators were moving much more swiftly. By Sept. 8, Fishman's first official day on the job, the Office of Thrift Supervision (OTS) had tightened its oversight of WaMu's risk-management and compliance operations and required it to submit a detailed multiyear business plan.

Morningstar analyst Jaime Peters said at the time it was the first overt sign that OTS was seriously worried about WaMu's health. Regulators also were pressuring WaMu to either raise new capital or find a buyer — fast.

They had good reason to be concerned. Outside analysts estimated a WaMu failure could cost the Federal Deposit Insurance Corp. (FDIC) as much as $24 billion; with other big banks teetering, the agency wanted to minimize the hits to its $45.2 billion insurance fund.

Depositors had been pulling funds from the Seattle-based thrift for months, but the pace accelerated sharply two weeks ago, OTS officials said. The biggest withdrawals, they said, came from retail depositors — ordinary, longtime customers, not the "hot money" managed by brokers seeking high rates that often is blamed for destabilizing banks. As fears grew that the nation's financial system was veering toward chaos, WaMu customers withdrew $16.7 billion in deposits between Sept. 15 and 24.

Regulators said they feared that if WaMu kept losing deposits at that rate, it would run out of cash to carry on normal business operations — what bankers refer to as "liquidity."

"It was a liquidity crisis, not a capital crisis," Polakoff said in a conference call Friday morning.

By Sept. 11, at WaMu's direction, Goldman Sachs began actively marketing the thrift. All sorts of transactions were being considered, from finding new investors, to selling off pieces of the company, to a complete sale. "Anything you could think of that the regulators would go for was on the table," said the person familiar with board members' thinking. "Even in the waning days, we were looking at stand-alone, capital-infusion scenarios."
Besides JPMorgan Chase, banks that looked over WaMu included Citigroup, Wells Fargo, HSBC, Spain's Banco Santander and Canada's TD Bank. Several private-equity firms and a few sovereign-wealth funds also were approached, the person said.

"They were running on a second track," he said. "They were telling us, 'Do this, do that, look for capital, look for a buyer,' and at the same time they were feeling people out." Spokesmen for the agencies declined to respond to those contentions Saturday.

Another complicating factor was the prospect of a big federal bailout package for the financial sector, formally proposed on Sept. 19 but widely rumored earlier. If WaMu, or an acquirer, were able to offload some of the most toxic mortgage debt to the government, that could make a deal pricier but safer.

"If you were a buyer, why would you do anything before the government passes that bill?" the source said. Reich agreed that the bailout proposal was "at the least, a significant distraction, and probably played a role in the [decision] of some parties not to make a bid."

In any event, time was rapidly running out. On Sept. 15, Standard & Poor's cut WaMu's credit rating to junk-bond status. On Sept. 18, the OTS cut its risk rating on WaMu again, classifying it as a troubled bank. With no buyers or investors coming forward, WaMu tried one more option to stay afloat. Early last week it approached the Federal Reserve and the Federal Home Loan Banks (FHLB), asking for exceptions to their usual borrowing rules.
If the Fed and FHLB were willing to accept lower-grade collateral, WaMu hoped, it could borrow enough cash to stay afloat longer.

The WaMu source said many in the company and among its investors believe WaMu could have righted itself, or at least struggled on for a few more months, had regulators shown some forbearance. The lost billions in deposits might well have returned once the financial crisis abated, he said.
"At the end of the day," he said, "we simply ran out of time." But Reich, Bair and other officials insisted that WaMu's cash position was deteriorating so quickly, and its options disappearing so relentlessly, that the only responsible thing to do was to shut it down.

"These events show the enormous toll that the economic crisis has taken on our nation's housing sector," Reich said. "The core business of WaMu was making home mortgages, and that business has been hit hard — hard enough, as it turns out, to topple a giant."
Drew DeSilver: 206-464-3145 or ddesilver@seattletimes.com (ddesilver@seattletimes.com)

[alkemical]

I figured out why "saving" money has to happen in an econ like ours.

If there's no money saved, then there's less money to make magically appear (fractional reserve lending - you know - how a bank turns $10 into $100 so to speak)

[baja]

who turned the calender back to 1929

[BroncoBuff]

Major local hit ...

And somehow, "JP Morgan" doesn't sound like a buyer who will care about the local economy :(

Seattle impact of WaMu failure
by Bill Virgin
Seattle Post-Intelligencer columnist

Seattle-based Washington Mutual, just days ago the nation's biggest thrift and once its biggest mortgage lender, earned a final, notorious distinction Thursday: It became the biggest U.S. bank in history to fail.

Laid low by its plunge into subprime mortgages and other less-than-sterling loans, WaMu was seized and closed by federal regulators Thursday afternoon. JPMorgan Chase, which has long coveted WaMu, bought all its deposits and banking assets for $1.9 billion.

http://img392.imageshack.us/img392/1525/2008205859st0.jpg (http://imageshack.us)

Hit for headquarters

WaMu's 43,200 employees won't feel any immediate impact, though it's likely JPMorgan will drastically shrink the thrift's headquarters staff. More than 3,500 people work at WaMu's 42-story headquarters at Second Avenue and Union Street, along with 800 people elsewhere in Seattle and 1,500 people elsewhere in Washington state.

WaMu's demise will further erode the downtown Seattle office market, already starting to suffer the effects of the national economic slide.

Commercial real-estate brokers said WaMu owns or leases about 1.6 million square feet downtown, more than any other company. That's the equivalent of all the office space in the Columbia Center, Seattle's tallest building.

JPMorgan acquired WaMu's headquarters, the 42-story, 900,000-square-foot WaMu Center at Second Avenue and Union Street, completed two years ago.

WaMu also leases about 700,000 square feet in nearby downtown buildings, including the Washington Mutual Tower at 1201 Third Ave., the Newmark Tower and the 1111 Third Avenue Building.

If JPMorgan Chase cuts WaMu corporate staff in Seattle and large amounts of office space are put on the market, that could drive vacancy rates up and lease rates down.

That, in turn, could help persuade developers with new downtown office projects in the pipeline to hold off on construction.

[L.A. BRONCOS FAN]

The more I learn about this crap, it real come down to freaking bank deregulation that allowed the mega-banks to be created.

Yep.

Bush = Hoover 2.0

Under Bush, Fannie and Freddie went from mandatory regulation to voluntary regulation - starting in 2002.

Bush's policy of putting foxes in charge of hen houses and allowing the banking and mortgage industries to police themselves essentially turned the U.S. financial system into a casino (and one that was heavily rigged in the house's favor.)

[BroncoBuff]

Yep.

Bush = Hoover 2.0

Under Bush, Fannie and Freddie went from mandatory regulation to voluntary regulation - starting in 2002.

Bush's policy of putting foxes in charge of hen houses and allowing the banking and mortgage industries to police themselves essentially turned the U.S. financial system into a casino (and one that was heavily rigged in the house's favor.)
I'm starting to be haunted by that Thomas Jefferson quote baja or Roh posted recently ... about how when the banks have the power, everything goes to hell.

[L.A. BRONCOS FAN]

I'm starting to be haunted by that Thomas Jefferson quote baja or Roh posted recently ... about how when the banks have the power, everything goes to hell.

Those who fail to learn from history are doomed to repeat it.

This isn't the first or the only time the international banking cartels have pulled this same swindle on America.

Wake up, and don't fall for the economic "mushroom clouds," people!

[baja]

Those who fail to learn from history are doomed to repeat it.

This isn't the first or the only time the international banking cartels have pulled this same swindle on America.

Wake up, and don't fall for the economic "mushroom clouds," people!

Yesterday the stock market lost nearly twice the cost of the bail out (band aid). We need to get these people out of the white house before we can begin to accomplish any real fix so as painful as a bail out will be I'm for it. God help us if John McBabble & Sarah "I'm smart too" Palin wins.