Friday, September 26, 2008

Goverment takes over a busted up WaMu

Washington Mutual Inc. aka WaMu faced going under today. the US government came in and seized it's assets and sold WaMu's banking to JP Morgan Chase.

WaMu stock has been on shaky ground since last week's market melt down on Monday, but it seems that that news made people nervous and a lot of them took their money out of WaMu bank, $16.7 billion worth of money. WaMu couldn't take that big of a hit...a bank going under because of a run by people to pull their money on the bank, dear god where did I see that before? oh yeah that was one of the key factors that caused the great depression.

of course to top those banks in that went under during the depression, Washington Mutual's going under makes it the biggest banking failure in history.

now to be far WaMu was having problems before last week market meltdown. They where a part of the subprime mortgage loans mess. They took a big hit when a lot of people couldn't pay their mortgage and ended up defaulting. Thought to the companies credit they did start to work with people to work out ways they could pay. But that was after the company already took great losses because of subprime fiasco.

The news of the buyout has had negative reaction around the world. Asian investors are now more nervous about investing in American and the stock market is down as I write this.

also I can't help but wondering if JP Morgan Chase buying WaMu is a good ideal in the long run. Yes, I can see where the selling it to JP Morgan and Chase is better then just letting it go under but in an era when we are facing banks that are said to be to big to go under why are allowing JP Morgan Chase to get bigger and bigger.

JP Morgan Chase is the nation's 2nd largest bank but going by deposits it is the largest.

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