So WAMU just got seized by federal regulators and sold to JPMorgan Chase late this afternoon. You can read about it here, here, and here. And that’s just to get you started.
It’s the largest bank failure in American history - and all of our accounts are there.
As news of the bank’s deteriorating condition spread, nervous Washington Mutual depositors withdrew $16.5 billion of their money in the last 10 days, prompting the seizure by regulators.
$16.5 Billion. Holy crap.
While withdrawing our money and guaranteeing a bank run may contribute to the demise, the bank can’t expect us to care about it over our own assets. Why should we act in the bank’s best interest and not our own? Frankly, the only reason I didn’t change everything was because we have a CD there and I didn’t want the early withdrawal penalty. That, and I’ve been busy. You know.
The FDIC chairperson says service should be seamless. We’ll see. I sure hope so. But I just got a new debit card and recently redid all my direct payments due to fraudulent activity. I really don’t want to have to start all over. We’ve got good rates on CD’s and a great interest rate on our online savings account, the best I’ve seen for a personal account under $25,000. I hope this buyout doesn’t screw all that up. I gotta say, their interest rates have kept me loyal.
I think I might be stopping by a branch tomorrow, just to talk to someone.
This is just the latest news to scare me. I’m angry and I’m frightened - with the economy, with the administration, with the upcoming elections, with ignorance and stupidity, and toeing party lines, and flip-flopping, and holier-than-thou attitudes, and political posturing, and not getting answers from the people we’ve elected who are in charge of our tax dollars, and candidates who lie and refuse to talk to the press, and I’m trying to figure out some way to satirize my anger and make a point by using humor instead of ranting, and I just can’t do it.
I have multiple posts brewing and I’m trying to CALM THE FUCK DOWN FIRST.
Deep breath, Kristen. May the peace of Christ be with you.
And also with you.
ja. this whole 700 billion dollar thing isn’t helping my confidence in all this either. my poor housemate got the brunt of me going on and on about my views of the administration and the stupidity that led us to this financial mess. i graduate in june too. with school debt and a humanities degree. breathe right?
I can understand being confused, but seriously, the FDIC situation covers you unlesss you have more than $100,000 in checking/savings. The people that will possibly suffer are those who have STOCK in WaMu. And as far as having to change your auto withdrawals, we have to do that about twice a year due to fraud, and we don’t even bank with WaMu! It is seriously a pain in the butt, but there isn’t any need to panic. Go by and talk to them, I’m sure they’ll make you feel better.
I won’t go into what a complete farce the FDIC is. It’s all well and good to say FDIC covers you, right up until the point where banks as large as WaMu start failing. My numbers could be wrong but I’m pretty sure that if the FDIC had to cover WaMu’s assets, it would bankrupt the FDIC. An isolated incident is one thing, but when most of our financial institutions are in danger, there is no way the FDIC can realistically cover anyone. Put another way, the only way the FDIC works is to make people feel safe enough to keep them from starting a bank run. It is false security that works only to certain point.
The good news for you guys is that regulator stepped in before it got to that point, and that Chase is one of the few banks that stuck to conservative lending and investing practices when the SEC under Bush essentially decided to stop regulating their cronies. Chase just bought your money for pennies on the dollar. It’s a good investment strategy for them, and you’ll be safe, as long as Chase continues to weather this crises. In terms of the nuisance it will cause you, mergers take a long time. It will probably take Chase at least a year to fold WaMu into it’s operations, so you shouldn’t see much change to your rates and bank policies in the short term. The reality is WaMu has been in danger for years, they took got themselves into big trouble in the early 00’s with a bad expansion strategy, and were in huge trouble for years. They recovered temporarily by betting huge on the sub-prime market. WaMu has never been a very solid company. Chase (which by the way, is really Bank One) is a very conservative bank and have positioned themselves very well. You’re probably better off with Chase.
That is, right up until the point where the number of failing banks tips the scale and the banks who were fiscally responsible are too few to bear the weight of the melt down. Then we’re all fucked.
I echo pretty much your entire last paragraph. This is incredibly frightening.