Friday, September 26, 2008

They'll close us up today - 5-4-3-2-1 - son of a...

Via here: In the biggest bank failure in U.S. history, the Federal Deposit Insurance Co. seized Washington Mutual's assets Thursday. The FDIC then quickly sold most of their assets and liabilities to JPMorgan.

Rich get richer? How does that happen? How does JPMorgan get first dibs? Were there even dibs or was this worked out beforehand? So many questions, no answers.

Simply put, WaMu was victimized by a classic "run on the bank." Customers withdrew $16.7 billion in a 10-day period following the bankruptcy of Lehman Brothers, leaving WaMu "with insufficient liquidity to meet its obligations".

I friggin told you. Eleven days ago, I told you. I made that reference to "It's a Wonderful Life" in this post where I asked that the banks not take Mr. Potter up on his offer and I asked that you not remove your money from your bank. But nobody listened. You withdrew and WaMu was seized, making this whole situation even more EF'd. Damn you. Damn you to hell.

The sobering truth, however, is that repeated declarations about the sanctity of FDIC insurance from Bair, President Bush, Treasury Secretary Paulson, Fed Chairman Bernanke and others failed to quell concerns among WaMu's customers. That suggests more "bank runs" could be in the offing unless the government moves quickly to restore confidence.


Labels: , , , |