Reply With Quote
Well, there you go. I wonder how many people who took part in the run were also. There were some real idiots in the last run I saw coverage of (Countrywide).
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," its regulators determined.
http://finance.yahoo.com/tech-ticker...%5EDJI,%5EGSPC
Awesome. Probably not the last one. Look out Wachovia.
Well, there you go. I wonder how many people who took part in the run were also. There were some real idiots in the last run I saw coverage of (Countrywide).
My expression of sympathy was sincere. Throw it back, if you will.
Oh, and not to poop in your Post Toasties, there's talk of the FDIC going broke and being unable to meet it's obligations, as well.
Not to say you're an idiot, but the Chase buyout means the FDIC won't have to pay a cent to WaMu depositors.
Oh, who am I kidding? I am saying you're an idiot.
Sept. 26 (Bloomberg) -- Washington Mutual Inc.'s holding company was detached from its branches and deposits when JPMorgan Chase & Co. bought the assets, helping the Federal Deposit Insurance Corp. dodge the bill for the lender's failure.
WaMu's collapse, the largest U.S. bank failure, came at a ``zero cost'' to the insurance fund for deposits, said FDIC Chairman Sheila Bair in an interview with Bloomberg Television. A ``clean, seamless transfer'' of the Seattle-based lender's banking unit helped shield the $45 billion fund, Bair said.
The FDIC's fund, drained by 12 other failures so far this year, was spared because WaMu's corporate structure let the agency seize only the bank. The holding company retained the liabilities, including senior and subordinated debt and equity.
``A wide swath of investors are going to be harmed by this, but the FDIC fund is going to come out of this unscathed,'' said Chip MacDonald, a partner in the capital markets group at Jones Day in Atlanta. ``That's the happy part.''
The FDIC seized WaMu's banking units, ``cherry-picked a little bit'' and merged the Washington Mutual Federal Savings Bank into JPMorgan without transferring all the liabilities, MacDonald said. ``The FDIC has nothing to do with the holding company.''
....
http://www.bloomberg.com/apps/news?p...drw&refer=home
Pretty slick, but probably not possible for most other banks. Hopefully more mergers and buyouts take place before outright failures.
Thats what they're doing. They're providing the capital via buying these bad securities from these banks. Its a two fold answer since removing the bad debt clears the balance sheet and allows for better credit ratings while simultaneously providing them with some liquidity which also provides them with a better credit rating.
Just giving them money is a bad idea, although the bailout of AIG was a loan in that manner. But thats because AIG has to have a certain amount of capital onhand to meet the requirmetns of the insurance bonds they have out on these MBS. If they don't, they automaticaly default on those bonds which then throws more insurance into the fray and starts a huge ripple effect. But anyway thats why they gave AIG the loan right after they let Lehman fail.
There are currently 1 users browsing this thread. (0 members and 1 guests)
Posting Permissions
