WaMu becomes biggest bank to fail in US history

[elessa]

i can only shake my head at self-fulfilling prophecy.

Washington Mutual's banking operations have been acquired by JPMorgan after federal regulators seized the bank following 10 days during which nervous depositors withdrew nearly $17 billion

Comments

[buzz_overdrive]

I left my money in. 'Course, I am well under the FDIC insured limit, so I figure it's easier to just leave it there.

$16B in 9 days (including Saturdays). That is impressive.

More people need to pay attention in history class. The bank runs at the beginning of The Great Depression ("Great" being an interesting choice) are an excellent example of how to create the crisis you fear.

(as you so aptly pointed out.)

[stmarc]

Maybe they were paying more attention than you think - the ones who start the run are the ones who get their money. :)

M

[buzz_overdrive]

At this point I've got less than $2,000 in my checking account. My savings are with another bank entirely.

If I had more than $100,000 in WaMu I might have panicked out of concern that the FDIC wouldn't have been able to cover the first $100K. Given the scale of the financial crisis it could very well have turned out to be like earthquake insurance in So Cal: when you need it so does everyone else, the insurers can't afford to pay all the claims, and nobody gets anything.

In my case, I figure the FDIC had a reasonable chance of being able to cough up $2K.

[stmarc]

Actually, bank runs are perfectly rational. The earlier you get your money out of a failing bank, the higher the likelihood that you will get all your money out.

While at least the first $100K is nominally insured by the FDIC/FSLIC these days, that doesn't help you if you have more than $100K in the bank, or if the bank goes completely sideways and you have to wait days or weeks for the FDIC to cover the accounts. Furthermore, I don't trust the FDIC's reserves - had WaMu gone completely sideways, their insured deposits exceeded the amount the FDIC has in its insurance fund by a factor of at least five.

Assuming that people will always behave rationally and things will always turn out well is what got us into this mess. Overreacting isn't the noblest of human traits but it makes more sense than ignoring patent danger. Anyway, Bearpont Morgan Chase bought your deposits and the news says everything should work normally for you, so I hope you don't have any trouble.

M

[elessa]

Bearpont Morgan Chase bought your deposits and the news says everything should work normally

which is why i didn't make a post filled with panic. ;-)

i guess i shall find out soon enough if that is indeed the case. haven't had an opportunity to go to the bank or to use my debit card since yesterday afternoon prior to reading of the failure.

fortunately i have less than $100K in the accounts. however, it is the bank with the amount i am living on currently which makes it a little dodgy.

[cerisefemme]

I am taking my money out, but it has nothing or very little to do with them failing. 1. J and I are combining accounts and he has been with Wells Fargo forever. 2. I am tired of wamu holding my deposits which is why I am outta there. They have consistently held out of state checks for 2 weeks, even when the check has cleared the other bank and I have proof. No check takes two weeks to clear anymore.

[elessa]

i am not fond of any bank, personally.

i currently bank at wells fargo, wamu and nifcu.

i have only had wamu hold one check in five years. however, given the considerable dollar amount of the inheritance, i understood it. they did release $5K for immediate use while the rest was held. hopefully the 3.95% interest i am earning on my savings doesn't evaporate.

wells fargo holds checks on me all the time. i am not keen on the whopping 0.25% interest i am earning there. however, i do believe in keeping my funds spread out.

b of a was a pain to deal with and i closed that account eighteen years ago when i opened the nifcu account.

i am seriously considering opening an account with ING.

banks are simply a necessary evil.

[nici13]

i agree

people are idiots

that is all

[descendingchaos]

i bank with bofa. Hopefully they survive this.