September 26, 2008

FLASH: And then, to complete the HousingPANIC clean sweep, Washingtion Mutual failed


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.

34 comments:

seattleMoose said...

Good riddance!!!!

Pure scum....

Anonymous said...

Man, I was just about to write you on the Wamu collapse. Not only that, I had a check made today to withdraw the last money I had in an account there. It wasn't much, about $4k, but I had a cold shill when I saw the news tonight. I thought that I had one more day to clean my account before the collapse, but I was short a day. Thank god JP bought it.

Lost Cause said...

Dancing in the streets. Crossing them off the list, hopefully for good. It is like a dream.

Karma, baby. Ex-customer, of soon to be ex-bank.

Anonymous said...

It is all a RACKET!!!!

JP Morgan and Goldman Sach will be the new Empire.

Jesus Christ, what a SCAM!!!!

Anonymous said...

OMG!! This is not good..
However, I want to give you credit Keith for predicting this whole mess! I have been a faithful silent reader for months if not years. You are the best!
Where do all of us go from here?
At least we have the intelligence and resources to survive. Wishing you all of the best. Ann

Lone said...

I have all my money at wamu. I'm not concerned. Thier retail banking portfolio was purchased by JPMORGAN. This move was not really a surprise.

Who cares if the rest of the bank falls on its face. My money is safe with my boys at JP.

If I held a mortgage, CD, or stock in WAMU i'd be a bit more concerned.

Anonymous said...

The Great Unwinding is here. Who's the next to fail?

George L said...

good,the way it should be.if they go broke,let them,and let the bigger fish eat the smaller fish.

a lot of people and companies around the world are waiting on the sidelines with plenty of cash to buy anyone that goes under.

JP and Goldman are going to buy a bunch of them,make them profitable in a few years and sell them for a huugeeee profit.

it's gonna get wild for a few months and we'll feel some pain but we'll make it thru.

Anonymous said...

Because of the takeover the retail banking operations are in tact and there will be no bank runs because of this government brokered deal with J.P.Morgan.

To me, their banking operation was pretty good . I guess like many dumb companies their lending divisions brought them down.

To the poster that thought they might of lost their money ,if JP Morgan hadn't bought the deposits and branches ,you still would of
got your money under FDIC . But I feel the same way you do that I don't like to wait in line .

Apparently JP Morgan offered them more for the bank about a year ago ,but they turned it down . So JP Morgan actually wanted the locations of those branches they have all over the place .

Could this of been more of a E-ticket ride this week in the news ?

k.w. - Southern Ca. said...

I'm amazed WaMu lasted as long as they did.

Lady Di said...

Another victim of OTC derivatives.

The dollar is toast.

Hubba Bubba said...

Kinda makes me sad... not so much for the CEo or exec's, but as a native Seattleite, it still hurts to watch a local company crash and burn

Anonymous said...

So how many of those 101,000 loans originated from WaMu.

http://www.bloomberg.com/apps/
news?pid=20601087&sid=
aSU7cx2EXfPQ&refer=home

More than 101,000 California households received a default notice, were warned of a pending auction or foreclosed on last month, RealtyTrac Inc., a seller of default data, said on Sept. 12.

California home prices tumbled a record 41 percent in August from a year earlier as foreclosure sales pushed down values in the most populous U.S. state.

The median price of an existing, single-family detached home fell to $350,140, the lowest since March 2003, and will likely fall further, the Los Angeles-based California Association of Realtors said today in a report. Sales increased 56.7 percent from August 2007 and 1.8 percent from July.

tater said...

You called it, Keith a LONG time ago. Great call!

Frank@Scottsdale-Sucks.com said...

LOL!!!

Oh well. Too bad, they were cute. I never had an account with them but have been inside branches and the place looks like it's decorated by Pottery Barn.

As I read this I'm getting to "Fleeced" by Dick Morris which totally rips into the subprime mortgage industry and especially singles out the Orange One. Ahh, the irony.

Anonymous said...

Keith,
I know there's a lot going on right now but even the MSM is mentioning that Cali prices are down 41%! I just saw an overseas reporter on Bloomberg repeat the number, as people thought it was a mistake. In the old days, that might've been worthy of a post.

Also, I'm glad nobody has any money in stocks and are soooo happy. All of your genius readers are in cash or gold, it seems, even their parents aren't losing anything in their retirement accounts. Uh huh.

Anonymous said...

TOOK ALL I HAD OUT OF WAMU BUT A 101,250 CD TWO MONTHS BACK AFTER READING THIS SITE AND LOST 5 MONTHS INTEREST ON ITS 4.95 PERCENT INTEREST BECAUSE THOSE PICTURES YOU POSTED WOULD HAVE GRATED UPON MY EYES MORE THAN I COULD HAVE HANDLED...... WONDER WHAT HAPPENS NOW,..............

screwchina said...

Here's some top secret video filmed deep inside the White House of Paulson discussing the original plan to get a great golden parachute before this admin leaves office. So, here's the original plan...

http://www.youtube.com/watch?v=jTmXHvGZiSY

Anonymous said...

13 banks failed so far this year who is next.

http://www.fdic.gov/bank/individual/
failed/banklist.html

Anonymous said...

Re: Wachovia next Bank to Fail? ?? ??

Wachovia owns 120B of pick-a-payment mortgage loans. This is shady loans.

Even if non performing asset jumps to 5%, we're looking at 23B loss.

Shareholder's equity is at 80B now so we're still looking at around 6% tier 1 ratio.

http://messages.finance.yahoo.com/
Stocks_%28A_to_Z%29/Stocks_W/
threadview?m=tm&bn=19722&tid=
111134&mid=111159&tof=4&rt=2&
frt=2&off=1

bitterrenter said...

But the conservative brainstems say it was the borrowers fault, that Clinton and Carter forced those banks to loan money to people who couldn't pay it back! Why, the republicans like Bush and McStain wanted MORE regulation!

This is so like you liberals to blame the good people and let the bad democrats get away with something! BOO HOO! A conservative just can't get a fair shake in this country!

--------
I hope the masses hunt down the republicans and send them off to die in the Yukon.

Anonymous said...

Heck, they couldn't wait till Friday night to Fail, like all the other Banks???

Anonymous said...

My wife told me this morning to go the the sporting goods store and stock up on ammo. This is going to get very, very ugly. Trying to decide if this " SUCKER" god I love the way bush used "fancy" words where to go? My parents have a farm in Northern California, but I'm on the East coast. I think a farm in California would be the best choice.

Anonymous said...

Sucker Nation!

Burn baby, burn!

Anonymous said...

You should have a thread about the timing of the FDIC seizing Wamu...

Something's very rotten...

Anonymous said...

>> My money is safe with my boys at JP.

Just like the money was safe at Lehman and Bear?

Anonymous said...

IN this case what happen if you have a WAMU mortgage.

Anonymous said...

that was the bank that HP said would be the next to fail. how about that...

Mammoth said...

Woo-Hoo! Woo-Hoo!
Hahahahahahahahahahaha!

Well, it all seems funny, until we find out that the amount of toxic sh*t on WaMu’s books isn’t $19 Billion, but $29 Billion instead.

-Mammoth

Mike Hunt said...

Keith,

Brilliant and spot on. Your hit rate is top notch! Well done.

How is the crash in the UK progressing? Is it still relatively orderly or is the train coming off the rails like in the USA?

Anonymous said...

This is WONDERFUL!

Wachovia next.

Anonymous said...

As a WaMu employee who was on the verge of getting laid off and who was worried that I wouldn't get severance because WaMu was going to go bankrupt - woo hoo!

I'm now a very happy JPMorgan & Chase employee!

Still probably will get laid off - but that's postponed indefinitely - and I'll definitely get a severance!

Anonymous said...

The bottom line is that if JP Morgan thinks the prices will fall
than that puts at risk the loans the Wall Street wants the taxpayers to take on .

So , for Paulson to even suggest that a upside profit is possible for
taxpayers is absurd .

The free markets have ways of
weeding out bad banks and thats called BK . Now the gamblers in equity in Banks or loans or stocks in banks will get clobbered ,no question .

In that bigger or stronger Bank will emerge ,or smaller banks get more of a market share is what will happen . This is Wall Streets attempt to keep banks from failing ,but they can be taken over .

FDIC should be enough protection for people for deposits ,and they have already shored up
money markets . So ,the government cannot insure that all investments are not going to fail .

I beginning to think that a
out right NO should be given to Paulson Plan .

Anonymous said...

Those toxic securities are not
worth a darn and have low value .
Everybody know that the market is still declining . Therefore the government has to pay less for them because of down side risk . These asset would of been sold ,had there been buyers ,so this is a joke that those assets have a up side potential .,the will loose value if anything .

If the taxpayers have warrants against any loss on the purchase of this junk ,than that might be a protection . Further ,many of these companies are still going to go BK so having warrants against a junk company is a joke .

The problem with just trying to throw a blank check at buying toxic waste is that there is only a down side and a opportunity for the thieves of Wall Street to play big time games with taking advantage .

Your trying to make a deal with the devil and that is why you are getting all this panic and side-bars that takes away from discovery of what Wall Street Lenders want to screw the taxpayer .F- them . They were already lying in saying it was a emergency .

I hope Congress and the Senate have aids that understand the screwing the taxpayers will get
if they don't cut a good deal (forget equity in failing companies that don't have a business model that want taxpayers to sweeten the deal for a buy out.

THe Paulson deal is wrong . Cash injections so Companies can orderly BK or merge with a stronger company ,or Companies selling off their own junk ,is what should be done .

200 economists from around the United States signed a petition to stop the Paulson plan . Go to Senator Shelby's web site and you will find the petition and the reasons why .Do you trust Paulson or do you trust 200 scholars from the cream of the crop .

I think we all know that Paulson wasn't convincing ,so there must be a hidden agenda . Stop these thieves .