JP Morgan Chase to acquire struggling Washington Mutual. I suppose that means I shouldn’t continue to expect 3.75 percent interest on my savings account, should I?
UPDATE:
Okay, now the NY Times is saying that WaMu has been “seized” by the FDIC, and its retail banking and “other pieces” sold off to JP Morgan Chase. But…
The Federal Deposit Insurance Corporation issued a statement on Thursday evening promising a seamless transition. “For all depositors and other customers of Washington Mutual Bank, this is simply a combination of two banks,” said the F.D.I.C. chairman, Sheila C. Bair, adding that for Washington Mutual’s customers, it would be “business as usual come Friday morning.”
I just checked, and I still have access to my account. Not so sure about that sweet interest rate though.
UPDATE, UPDATE:
Largest. Bank failure. Ever. (We’re number one!)
We need to check with Caribou Barbie’s visiting pastor to see if WaMu needed a witch kicked out. I betcha it’s all related.
Or something.
Deal may be dead. McCain’s fault. Injects presidential politics.
http://abcnews.go.com/Politics.....038;page=1
“McCain First, Country Second.”
CNBC reports that the FDIC has seized WaMu’s assets.
George Stephanopolis stated on CBS News a few minutes ago that the White House bailout meeting “immediately went off track” and turned into “chaos” and “pandemonium.”
Apparently the problem is that a group of very conservative House Republicans want a “completely different approach” from the package that had been worked out between congressional leaders and the administration.
@4 It was a McCain campaign stunt. What an ass.
5
You mean McCain didn’t put “country first”? My illusions have been shattered. Lord, can’t I trust in anyone?
@6 When they started that “Country First” shit, I knew they were lying. They’re always fucking lying.
And we’re off to the races! It wasn’t all that long ago that WaMu was the darling of the local business pages and their home loans were the star attraction.
Don’t always believe what you read in the paper kids.
My bank is the First National Bank of the Coffee Can. Branches are in well established remote forest locations throughout eastern WA.
9 Oh…is that where you’re putting your Incredible Shrinking Dollars?
No, something of value…like comic books.
By the way…WaMu has already changed their website…”Welcome to JP Morgan Chase WaMu customers!”
The FISCAL conservatives may have a valid argument
Set politics aside for a second–
The idea of providing limited insurance in order to help create a market for this dogshit paper does have some merit vs. a huge checkbook with some confusing caveats.
Lehman Bros. wanted too much for their dogshit paper a year or so ago. Had they sold at market, this collapse could have been possibly avoided…or the impact softened.
Wells Fargo has always been very conservative relative to these sub-prime loans…avoiding them. Hence they are successful.
I would hesitate to give some of these greedy Wall Street bastards who hand a hand in this mess and profitted handsomely…a checkbook with taxpayer money.
Blue John may be right with the figures he presented.
There is plenty of blame to go around on this. The biggest culprits are the Wall Street bigwig’s who demanded more of the subprime loans so they could package and sell them for more & more commissions. Should the government have stepped in sooner? Yup.
Why didn’t they? Look at the campaign contributions and affiliations and decide for yourselves.
The majority of our leaders in Congress are dirty…R’s and D’s.
I think they should all be thrown out of office.
#12 – The problem is more than that. It is not the underlying mortgages. It is the derivatives based on them, many of which are not only not worth anything, but are liabilities. Their stated worth as of a couple years ago was several times the value of the mortgages. And unlike with the actual mortgages, whose face value may only go down 2-3%, these can lose all the value.
Why do we care about this? After all, so what if a few huge players go bust for being idiots? The reason is that because no one trusts these assets, banks are now unwilling to lend to each other. That means they don’t have the money to lend to businesses and consumers. The whole system falls apart. That’s essentially what happened to AIG.
I’m not saying the bailout is the answer (I don’t believe it is). But the data you are referring to are not really getting at the problem.
#13 Paulson correctly told Obama that insurance wouldn’t work. Why? He didn’t say, but it’s because the underlying investments are garbage. As I said, the mortgages are not the underlying investments, really. If we insure the derivatives, we will wind up paying out in the trillions in all likelihood and whatever premiums we take in would be minimal compared to that.
The bottom line here is that there are trillions in arbitrary wealth that need to be devalued. These trillions have been leveraged and borrowed against to the point where they infect much of the interrelated western financial markets, not just companies that gambled big. That “wealth” is going away, the question is who pays the price. The current value of all of our houses and investments is tied to that false wealth.
The bailout would attempt to spread the pain as widely and over as long a period of time as possible, but ironically would not spread the pain to the a lot of the firms most guilty. Since, as I said, their value has a direct impact on the value of all our assets, we can’t just let them tank. But in my opinion, the only real answer to truly spread the pain as much as possible is to essentially replace bankruptcy with nationalization. If one of these firms goes under, the gov’t takes it over, period. No loans, no creating a market for something that’s worthless anyway. We take over and clean things up and eventually sell it.
This approach has plenty of pain. But it is far more likely to work and represents far less risk to the taxpayers than this ridiculous bailout. We are almost guaranteed to lose everything we spend on the bailout. We will have to massively overpay or the exercise is pointless. WaMu just went for 1 cent on the dollar, and that was for the units that have some value, not for just it’s toxic debt.
Now, there are problems with my suggestion. I certainly would love to hear a better one. I have heard a lot of suggestions about how to fix the problem other than the bailout, but few of them reflect a real understanding of the problem.