Fannie - check
Freddie - check
Countrywide - check
Indymac - check
WaMu - check
Why did they all fail? Because they knowingly and illegally enabled mortgage fraud by writing or buying "liar's loans". They called them liar's loans for a reason. It was fraud. And they knew it.
Idiots. Committing crimes and knowingly destroying their companies all to enrich themselves with short-term commissions.
And when the arrests start, and yes, eventually, they will start, it's these companies in my personal opinion that will contribute the greatest number of new inmates to our fine prison system. Mortgage fraud is a crime. It was before Bush at least. And under the next president's justice department, let's hope it will be again.
Paulson avoided bank lines outside WaMu or a hit to the broke-ass-FDIC though, by getting his friends at JPMorgan to take them on. Who will of course then sell the $30 billion plus in toxic debt to Paulson (and the taxpayer). Brilliant.
The WM stockholders got wiped out as expected, and a lot of their employees will get the ax too. And anyone else get the feeling JPMorgan and Goldman Sachs are going to make out just fine after the dust settles and Paulson gets done with us?
WaMu is largest U.S. bank failure
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.
September 26, 2008
Posted by blogger at 9/26/2008