WaMu fact of the day

With $310 billion in assets (hat tip Nemo), WaMu would be the biggest bank failure in history – in fact it would be larger than the previous top ten added together (although maybe not in inflation adjusted terms).

Here is the link.


Pragmatic Q: I just moved to L.A. and picked WaMu for my banking (just up the street, fun to walk through their bulletproof glass airlocks, etc.) I only have about 5k, but it is all in there.
Should I go pull most of it out? Will the sheer size of WaMu slow down the FDIC process when/if they go under?

It's not that Wamu "would be" the biggest failure, it "will be" the biggest failure, most likely this weekend.

Of the 11 or 12 banks that have already failed this year, deposits on average have been 85-90% of assets. WaMu has about 50% deposits to assets. This is not good. The Federal Home Loan Banks are owed $56B alone. The FDIC is going to seize WaMu, sell of the deposits to some large bank, most likely Citi, and then try to work out the assets as best as they can for recovery against the $150B in non-deposit liabilities. This is going to be a massive loss for the FDIC.

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I'm secretly happy that WaMu is going down. I found their ad campaign featuring a herd of middle-to-senior aged white males to be somewhat insulting.

However, the performances of these male actors, once they were given their own lines were actually quite stellar.

So, an "A" for execution, and an "F" for two-dimensional stereotyping.

Being bailed out by the feds however does give rise to some obvious spoof material... SNL, are you taking notes?

We don't know what the true market value of their assets is. We only know this reported value.
If the market value is only $50 billion, is the failure smaller? Or would you say it has already happened (because the asset value has already collapsed. The bank is just the shell still holding them).

When I bought my current house, the owner was distressed and WaMu was her mortgage holder.

I tried to contact them about a deal and they never responded.

So, I ended up paying the owner extra so she could get out free and clear.

Now, I realize WaMu were such a-holes and didn't care one bit about making a deal or helping a credit victim get on with her life likely because they would get reimbursed for FHA loan defaults, or something like that. I don't have time to be an expert in stupidity, so that's my working explanation.

Good riddance.

Isn't it amazing that JP Morgan gets the government to support the takeover of their biggest competition?

Yes, it's remarkable that they bid the most money for Wamu. I cannot believe that happened. I am being sarcastic.

It was an auction. If Citi or another bidding party were to come forward and say "Hey, they're lying, we bid more and they screwed us for their friends" that would be a huge scandal, and they'd have strong incentives to do it.

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