WaMu Seized...

triciaeSeptember 25, 2008

tonight by the OTS & JP Morgan has purchased the deposits but will not take over the liabilities (well, duh!).

/tricia

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dave_donhoff

LOOOVE JPM!!!
The only financial stock in my holdings!
Woohoooo!
Dave

    Bookmark   September 25, 2008 at 10:38PM
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rockmanor

Interesting timing, don't you think?

    Bookmark   September 26, 2008 at 10:34AM
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chisue

Tricia -- Do you think the way Norway and Sweden reorganized their financial markets after their housing bust would work here? It sounds like the way you described working through the S & L mess -- agents take over, sort the good paper from the bad, etc., and some banks fail.

Also, I'm curious to know what I could have expected had I last week invested in a WaMu CD paying 5%. Would JPMorgan honor it to maturity? Refund my deposit plus two cents earned? Do you know?

Hate these 'interesting times'! And an election on top of it all!

    Bookmark   September 26, 2008 at 11:11AM
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guvnah

When IndyMac went under there was a thread with a link or instructions to the FDIC website where I was somehow able to look at a chart with all the banks in my state (Texas) with a rating system from weak to strong.

I have been trying to find that chart again with no luck. Maybe it wasn't on the FDIC site after all?

Need to move some money around & would like to go with smaller banks in my area but would like to check their status.

Sorry this is off topic to this post, but I think I found it thru another of triciae's incredibly informative posts. I've learned so much from this forum!!

    Bookmark   September 26, 2008 at 11:50AM
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guvnah

Uh..... nevermind.... I found the chart. It was done by BauerFinancial. You can search by state & they apparently use data collected from the FDIC. I have no idea how accurate it is.

    Bookmark   September 26, 2008 at 12:07PM
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qdognj

:yawn:
This is something that was unexpected? Most depositors are safe,if not all...Losers here are those shareholders who didn't sell when they could have...

    Bookmark   September 26, 2008 at 2:14PM
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triciae

Many employees will become "losers" as well, qdog.

/t

    Bookmark   September 26, 2008 at 2:44PM
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qdognj

I would say many will NOT lose their jobs,some will,but not most..And if JPM didn't buy the deposits and asset,most would have lost their jobs due to bankruptcy...And when the company was deteriorating for the last year,i would like to believe many people started looking for employment elsewhere

    Bookmark   September 26, 2008 at 3:27PM
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dreamgarden

guvnah-"When IndyMac went under there was a thread with a link or instructions to the FDIC website where I was somehow able to look at a chart with all the banks in my state (Texas) with a rating system from weak to strong.

I have been trying to find that chart again with no luck. Maybe it wasn't on the FDIC site after all?"

There is another site as well.

To get a free safety rating on your institution, follow these steps:

Step 1. Go to TheStreet.com's Banks & Thrifts Screener.

Step 2. Look for the green box to enter your information. Under "Bank Name," type in only the first word of your institution's name.

Step 3. To the right of your bank or thrift's name, make note of its rating: A is excellent, B is good, C is fair, D is weak and E is very weak.

Step 4. Use these general guidelines:

* If your bank or thrift is rated B+ or better, we believe it's secure.

* If its rating is between B- and C-, check it a few times per year to make sure it hasn't fallen below C-.

* If it's D+ or lower, seriously consider switching to a safer institution, of which there are many to choose from.

    Bookmark   September 26, 2008 at 3:30PM
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jasper60103

WaMu carries my mortgage.

Wonder what the notice will say?

    Bookmark   September 26, 2008 at 5:29PM
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dave_donhoff

Jasper,
Your monthly billing is made by a servicing company... one who's name you probably don't even know, as they issue out the payment invoices "private labeled" in the name of WaMu.

Since Chase bought WaMu's assets (which a mortgage note, and the servicing rights, are both assets,) they may choose to have your invoice re-labeled to Chase... or not.

It won't make any difference overall anyway.

Cheers,
Dave Donhoff
Leverage Planner

    Bookmark   September 26, 2008 at 6:58PM
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docholiday

qdognj: yawn.

Are you kidding me? This is a big problem because $20B in bonds were just wiped out. Those bond holders probably had insurance in the form of credit default swaps (CDS) that are going to have to be paid. But anyone can write swaps because they are not regulated like insurance is. So some other bank or hedge fund could be wiped out because of this, and that would cause yet another bankruptcy, and another...

Credit default swaps tightly couple the entire financial field and are quite new (the bulk of the industry is less than 10 years old). The system has not been stressed tested, but the small bit of experience we have with them, such as LTCM in '98, and AIG just a couple weeks ago isn't pretty.

WaMu is a big deal until we see all the dust settle and make sure nothing else is brought down.

    Bookmark   September 26, 2008 at 9:43PM
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qdognj

dr holiday
the :yawn: was for the thought that this was EXPECTED..The collateral damage may be painful,but sometimes that is the only outcome...Perhaps its time we let the markets shake out,take our lumps, and slowly,very slowly start a recovery..

    Bookmark   September 26, 2008 at 10:06PM
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patser

qdog, when the markets shake out and we take our lumps, let's hope that none of those bonds were in your 401k/pension plans:)

    Bookmark   September 27, 2008 at 7:14AM
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qdognj

patser,if i happen to have some of those bonds and i lose the investment,that is the risk an investor takes...The problem is people who think an investment is 100% safe,there is risk to ALL investments outside of bank cds which are guaranteed by FDIC to 100k...The reason we are in such dire staits is the fact people/companies took all kinds of risks without concern to the possible loss of $$$..This is true for stocks,bonds and more important ly,HOMES...If the market gets crushed Monday, i am BUYING...When the masses sell or buy,go the opposite way :)

    Bookmark   September 27, 2008 at 11:42AM
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brickeyee

Higher returns equals higher risk.

Looks like a new generation is going to learn this the hard way.

Wall Street fell in love with the purported higher returns that would occur when sub-prime loans reset and teaser rates on adjustable expired (and sometimes they are even the same teaser rate sub-primes).

They failed to take account that those higher rates carried higher risk.

    Bookmark   September 27, 2008 at 3:36PM
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patser

Brick, You don't think that Wall St. just sat collecting those higher returns all by themselves, do you? Many of those higher returns were sold to pension funds, insurance companies, company investment portfolios, individual investment portfolios...the list goes on.

qdog, I so agree with your buying strategy.

    Bookmark   September 28, 2008 at 8:54AM
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brickeyee

Wall Street packaged up the mortgages into bonds, and was more than happy to sell them to anyone looking for a higher return.

No one would have been buying them if the Street had not created them.

    Bookmark   September 28, 2008 at 10:41AM
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chisue

Now we taxpayers get to 'buy' them. Grrrrr!

    Bookmark   September 28, 2008 at 11:03AM
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dreamgarden

Now we know what happens when we let banks regulate themselves. They play casino with OUR money.

Bush, Skilling and Paulson have Harvard MBA's. Why would these exceptionally 'well educated' individuals allow public companies to keep over-the-counter (OTC) and exchange-traded contracts outside the auspices of exchanges?

I don't believe this was an accident. Everyone who contributed to this financial treason of our economy needs bail, NOT a bail-out.

Simple, quiet people who just go to work and pay their bills and do not play stupid Wall Street games arent even considered in this debacle. Do you know what "trickle down" means? It means the poor get pissed on.

Let the big banks, insurance companies, and investment banks take out their own trash. The uncertainty in the market stems from their own dishonesty. Write down how much junk is in your books and lets get back to work. But donÂt ask me to shell out $$$$ for your garbage.

    Bookmark   September 28, 2008 at 5:37PM
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allenwrench

Consumption is ingrained in us and we know no other way. And even if we wished to amend our ways, how could all our retirement funds take the hit? America is built on borrowed money, spending and consumerism.

Fueling the problem of consumption is the games the Federal and World banks play with interest rates. They manage the economies in ways to fuel consumption and mask the real trend. We know the story...stock market goes down so there are cries for Federal bankers to lower interest rates...so the stock market can go up...fueled by spending of the consumer.

It is drug habit that Greenspan got us hooked on and we just can't get away from.

Our economy is not based on sustainable health - it is based low interest credit to encourage compulsive spending, debt and living a life of constant consumption with a 'disposable mentality' when it comes to durable goods.

All this consumption to artificially fuel our economy to make our retirement funds only go up contributes to more and more global warming and the depletion of our natural resources. Then the governments juggle the numbers to make the inflation figures seem artificially low, so everyone's retirement portfolio will make them happy so they will continue to buy and consume more...and on it goes....IT IS ALL WE KNOW and the bill is coming due soon!

Book and DVD list. All available from your local library.

Beyond Oil: the view from Hubbert's Peak
by Deffeyes, Kenneth S.
http://www.princeton.edu/hubbert/

The Coming Economic Collapse - how you can thrive when oil costs $200 a barrel
by Leeb, Stephen

A Crude Awakening - the oil crash
Lava Productions AG, Switzerland DVD
http://www.oilcrashmovie.com/

The End of Suburbia - oil depletion and the collapse of the American dream
by Greene, Gregory DVD
http://www.endofsuburbia.com/

Fed Up
http://www.amazon.com/Fed-Up-Angelo-Sacerdote/dp/B000CNGC6G

High Noon for Natural Gas: the new energy crisis
by Darley, Julian
http://www.highnoon.ws/

The Long Emergency: surviving the converging catastrophes of the twenty-first century
by Kunstler, James Howard

Oil Apocalypse
History channel DVD

Peak Oil Survival: preparation for life after gridcrash
by McBay, Aric

Powerdown: options and actions for a post-carbon world
by Heinberg, Richard

Resource Wars: the new landscape of global conflict
by Klare, Michael T
http://www.amazon.com/Resource-Wars-Landscape-Conflict-Introduction/dp/0805055762

A Thousand Barrels a Second: the coming oil break point and the challenges facing an energy dependent world
by Tertzakian, Peter

Twilight in the Desert: the coming Saudi oil shock and the world economy
by Simmons, Matthew R.
Well written book examining 12 of the key Saudi oil fields.

Who Killed the Electric Car?
Sony Pictures Classics release
http://www.sonyclassics.com/whokilledtheelectriccar/

Zoom:the global race to fuel the car of the future
by Iain Carson and Vijay V. Vaitheeswaran.

    Bookmark   October 2, 2008 at 11:52AM
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brickeyee

The club of Rome is alive and well.

To bad history proved them wrong.

    Bookmark   October 2, 2008 at 8:05PM
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jkom51

>>Now we know what happens when we let banks regulate themselvesSelf-regulation has always been one of the unvoiced but key beliefs of the Republican party. It's what they mean when they say, "less regulation, smaller government."

It is one of the reasons the FDA is understaffed and has a difficult time policing our food supply. The SEC has had critical positions remain vacant for several years that were supposed to have been overseeing the increased debt ratios the investment banks took on after the SEC loosened their reserve requirements in 2004. We have the regulatory tools, but there is no mandate for enforcement.

    Bookmark   October 4, 2008 at 1:21PM
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mfbenson

"Now we know what happens when we let banks regulate themselves."

Spare me. In every transaction, there are two parties. Borrowers who borrow money they can't possibly repay are just as guilty as lenders who didn't do their diligence.
Perhaps you would like having a government agency tell you which houses you aren't allowed to buy; in my own case I don't need the paternalism and don't want to have to pay for parenting other people.

    Bookmark   October 5, 2008 at 11:48AM
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