Thursday, September 25, 2008

WaMu is Toast: UPDATE

I really, really, really hope you heeded my advice and took anything over $100,000 out of WaMu.

If you're under those FDIC-insured limits, you're fine. The FDIC already found a buyer for the deposits (JP Morgan), so don't panic.

I have money in several WaMu accounts and I'm not sweating it (well, I'm kind of sweating it--this is big freaking news!). Remember, the FDIC still has money--which may not be the case a few months from now.

REUTERS: WaMu is largest U.S. bank failure

By Elinor Comlay and Jonathan Stempel

Washington Mutual Inc was closed by the U.S. government in by far the largest failure of a U.S. bank, and its banking assets were sold to JPMorgan Chase & Co for $1.9 billion.

Thursday's seizure and sale is the latest historic step in U.S. government attempts to clean up a banking industry littered with toxic mortgage debt. Negotiations over a $700 billion bailout of the entire financial system stalled in Washington on Thursday.

Washington Mutual, the largest U.S. savings and loan, has been one of the lenders hardest hit by the nation's housing bust and credit crisis, and had already suffered from soaring mortgage losses.

Washington Mutual was shut by the federal Office of Thrift Supervision, and the Federal Deposit Insurance Corp was named receiver. This followed $16.7 billion of deposit outflows at the Seattle-based thrift since Sept 15, the OTS said.

"With insufficient liquidity to meet its obligations, WaMu was in an unsafe and unsound condition to transact business," the OTS said.

Customers should expect business as usual on Friday, and all depositors are fully protected, the FDIC said.



  1. Heh, I wouldn't sweat it. The FDIC will always have dollars to pay out.

    These "new dollars" may not be worth quite as much after all the inflation than the "old dollars" that you deposited...but you will still get "dollars" back!


  2. Ha! True, they will still technically be "dollars." But stacks of these "dollars" will be more accurately described as "doorstops."

    Zimbabwe, here we come!

  3. 10 days later, and most places are still honoring my checks from WAMU...

    This is a learning process for all of us.

    I don't think Zimbabwe yet, I still have running water, and a place to rest my head at night. Counting my blessings and just grateful for what I have this evening.

    Keep up the great posts El Bee!

  4. ex-lbcer,

    I'm with you. I was with friends tonight remarking at just how lucky we are--despite the losses to our 401ks, stock investments, job security, or whatever.

    Although many jobs are at risk, I am thankful to be gainfully employed and am hoping for the absolute best in our frightening economic situation.

    Stay strong out there. And fasten your seatbelts because we are very likely at the precipice of a historic shift in our quality of life and expectations for the future.