My bank, Washington Mutual, just failed. The US government just took it over within the last couple hours. I am assured that in the morning JPMorgan Chase will have my money fine. They damn well better. If there is a tiny hiccup, we are yanking out all of our money. There will be a bank panic of terrible proportions if there are any teeny problems tomorrow, not so much with Washington Mutual, but the next bank rumored to fail. The next bank that is rumored to fail will be cleared out by depositors. Heck, we talked seriously about taking our money out of WaMu last week.
Millions of other Americans, and voters, are going to wake up tomorrow with the credit crisis in their own homes. And they will tune in to see the Presidential Debates. If John McCain isn't there, Obama will take questions for an hour, I am sure. McCain is just hanging around Washington hoping to take credit for any bailout plan that goes through. We don't need that. Especially not with him pretending that cheap grandstanding is for "country first."
Thursday, September 25, 2008
Millions of Americans Meet the Financial Crisis
Posted by The Law Talking Guy at 9:24 PM
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The "About WaMu" website says, "You'll know it right away: We're not like other banks." Ah, too true. With deposits of nearly $200 billion, WaMu has become the largest bank (yet) to fail in US History.
It was my bank also. This is not quite the way I wanted to be part of history, I guess you could say--I'm not really feeling the "Whoo hoo!" right now. FDIC chairman assures us there will be no interruption of service. But will the free checking continue?
The NY Times says that the deal happened largely behind the back of WaMu, between the FDIC and J. P. Morgan. WaMu had fired its CEO back in March and got a new one very recently. Apparently, he will make out like a bandit. Says the Times:
"The company’s new chief executive, Alan H. Fishman, was in midair, flying from New York to Seattle at the time the deal was finally brokered, according to people briefed on the situation. Mr. Fishman, who has been on the job for less than three weeks, is eligible for $11.6 million in cash severance and will get to keep his $7.5 million signing bonus, according to an analysis by James F. Reda and Associates."
Wow. Fishman made about $19 million per day for doing absolutely nothing. And Wall Street wonders why the rest of us are pissed to hell.
Wow, that's a lot of cabbage for Fishman to stuff into his mattress.
From the official J. P. Morgan press release on the coming merger:
"JPMorgan Chase & Co. (NYSE: JPM) tonight announced it has acquired all deposits, assets and certain liabilities of Washington Mutual's banking operations from the Federal Deposit Insurance Corporation (FDIC), effective immediately. Excluded from the transaction are the senior unsecured debt, subordinated debt, and preferred stock of Washington Mutual's banks. JPMorgan Chase will not be acquiring any assets or liabilities of the banks' parent holding company (WM) or the holding company's non-bank subsidiaries. As part of this transaction, JPMorgan Chase will make a payment of approximately $1.9 billion to the FDIC.
[...]
Customers of both companies may continue banking as usual, and feel confident that their deposits are secure, now backed by the strength and security of JPMorgan Chase. Employees and vendors should continue to operate business as usual.
Chase expects to convert Washington Mutual's consumer banking, home lending and credit card businesses to the Chase brand and technology platforms over the next two years. Chase and Washington Mutual customers should be able to access the combined network of 14,000 ATMs without fees in the coming months."
I should have said "acquisition" instead of "coming merger." Or perhaps fait accompli would be more appropriate.
Bank management would prefer a bailout where, like Fishman, they make out like bandits with our money, rather than under the bailout plan that is emerging that will have limits on executive compensation and golden parachutes.
So that explains some of why conservative republicans (shills for big business as always) are balking now.
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