What a Difference a Day Makes

I know I read yesterday morning’s paper, but I had no chance to catch the evening news, so it came as quite a shock that in the 24 hours I was shut off from news sources that the government had taken over WAMU and already sold off pieces of it. First, how did they do this without the bailout agreement getting through Congress? And how did they rustle up a deal in less than 24 hours? I mean it takes longer than that just to fill out the paperwork to sell a friggin house!The collapse of Washington Mutual is the largest in our nation’s history, and comes after getting hit daily by customer withdrawls and widespread stock sales, and the weight of enormous (bad) mortgage debt. The bank had assets ($307b) almost ten times larger than that of IndyMac, which failed in July ($32b). WAMU’s assets have been sold to J.P. Morgan, who also picked up Bear Stearns earlier this year. Looks like they are gunning to take over as top dog in the banking world, ranked second to only BofA.

If you are a WAMU banking customer, you should see no change in service at this point. As the companies integrate, I would surmise that branches will close and consolidate where there is overlap, and layoffs will be expected. But short term, all is status quo. If you are a shareholder, however, you are on the short end of the stick. This goes for individuals as well as equity investors. The government takeover means shares in WAMU are worth nothing.

BONUS: On the lighter side of things, I happened to catch the YouTube clip of Represenative Marcy Kaptur (D-Ohio), who took 5 minutes of the House of Represenative’s time earlier this week to be snarky, snide, and facetious about the $700 mil bailout. My kind of elected official! You can watch her pontificate on “Wall Street Bailout.”