[americandream]

Bought out? More like Bailed out by the tax payer yet again to make those at JPM even richer.

America as of now is the greatest welfare state that even existed. Welfare for the rich that is.

I'm glad you qualified that. I'm sick of so many punters blaming Marxism for this cock up.

[Cashmere]

Cashmere, the bailout is dead. Bush will not sign if executive compensation denied.

If that's the case, it really tells the tale, does it not?

They want to limit executive compensation to what? A few mill? But that's a problem.

Couldn't make this stuff up.

The executives jailed or hanged and Bush himself should be impeached.

I find your position a bit odd.

You'd hang the executives w/out trial but you'd give Bush the privilege of Due Process?

Odd.

[seldom_seen]

This is a BFD in my neck of the woods. A lot of people in Seattle are employed by this bank. It is not a buyout but a bank failure. The biggest in US history. JP Morgan swooped in to tear off a few tendons of the otherwise barren skeleton of this bank.

It will be interesting to see what details unfold...right now the MSM is calling for "business as usual" tomorrow at the bank, and supposedly the FDIC won't even need to tap its insurance funds? hmm.

The FDIC, which insures bank deposits, said it would not have to dip into the insurance fund as a result of the seizure. There had been concerns that the fund, which took a big hit after the seizure of IndyMac Bank, could be depleted by a WaMu seizure.

http://blogs.reuters.com/reuters-dealzo ... hday-bash/

[davep]

Washington Mutual - by far the largest bank failure... in American history

NTYimes

Between this and the stalling of the $700 gazillion rescue package, today is going to be crazy on the stock markets.

BTW, a quick thought. Why doesn't the US give this 700 billion dollars to the people having a hard time paying their sub-prime mortgages, to help them pay?

That way the banks' assets are no longer toxic, and millions of people don't lose their homes. Or is this too easy?

Edited to add the thread title after threads were joined, or it looked a bit weird

[mos6507]

It was timed to pressure the Beltway boys.

Proof?

[Cashmere]

Roc posted an opinion that the 700 billion corresponds to how much money the primary dealers will need to buy Treasuries in 09 to cover the deficit. That will prevent a failed treasury auction.

If you take that as the true motivation for the bail out - because a failed treasury auction would be an A bomb - then there would be no point to having homeowners get bailed out if that would not, per se, allow the banks to buy the required treasuries.

If you think that the govt. line on the bail out is correct - that this is needed to free liquidity in the banks, then the question becomes do you inject the antibiotics into the swollen head or into the foot?

The head, is what they tell us, will work.

[Tyler_JC]

I could solve the mortgage crisis.

Convert all of those non-performing 30 year mortgages into 50 year mortgages. That would lower the monthly payments while maintaining a strong profit projection for the banks.

People would become multi-generational slaves to their banks... but at least they could make the payment.

WaMu's failure shouldn't surprise anyone on this site but it is going to crush the financial markets tomorrow morning (assuming nothing happens tonight). We could be looking at a 250+ point fall in the Dow by lunchtime.

[Cid_Yama]

We live in a plutocracy. The point is to maintain those in power, in power.

The banks are insolvent. TPTB, if forced to recognize the losses, would be reduced to the level of you and me.

The Status Quo must be maintained. As in we will never let you know you had an opportunity to take us down.

[jboogy]

If the bail-out is indefinitely shelved, combined with wamu's seizure. I'm looking for 400 pts. by lunch and suspended trading shortly after. PPT will be overwhelmed.

[Dreamtwister]

WaMu's failure shouldn't surprise anyone on this site

It certainly wasn't a surprise to me...

If the bail-out is indefinitely shelved, combined with wamu's seizure. I'm looking for 400 pts. by lunch and suspended trading shortly after. PPT will be overwhelmed.

The first trading curb doesn't kick in until a 10% (around 1100 points) drop.

[jboogy]

I wasn't sure about that, I knew someone was going to correct me. I have to think though, if there is a steep enough drop in a short enough period of time, they will make new trading curb rules on the spot. Can't the exchange chairman call a halt to trading?

[Dreamtwister]

I have to think though, if there is a steep enough drop in a short enough period of time, they will make new trading curb rules on the spot. Can't the exchange chairman call a halt to trading?

I suppose he could, but that could actually make things worse in the long run. There was a day (I think) earlier this week where the NYSE was down over 500 points. If they had suspended trading over that, it could have caused a panic selloff when trading resumed, rather than prevent one. Considering how volatile things have been recently, making up a rule on the spot like that might actually bring the whole thing down.

[Captain_Meh]

What about swaps on WaMu? That's my concern.

[smallpoxgirl]

Proof?

Are you kidding? When did FDIC EVER take over a bank on a weekday? They always wait to close of business Friday so as to let people calm down before the markets re-open. WaMu has been dead for weeks. Their CDS were at 4000 basis points two weeks ago. I've been trying to figure out for weeks what FDIC was waiting on. Tonight it becomes obvious. They were waiting to sucker punch Congress and try to manipulate the bailout vote.

[Novus]

If it is not at least a 700 point decline it will be nothing but your run of the mill volatility.

[ReverseEngineer]

I've been trying to figure out for weeks what FDIC was waiting on. Tonight it becomes obvious. They were waiting to sucker punch Congress and try to manipulate the bailout vote.

The issue would be SmalPox that in all prior crashes the Bankers were able to take what "wealth" there was in the form of Gold from the old society and abscond with it to another safe haven where there was still undeveloped natural resource and an unwitting population that would accept them in. Long as the old society still accepted gold, they could use it to buy from the old society products that would help the new society grow, and the Sheeple were greatful for this improvement in their standard of living. So the English Bankers took over the American Banking system after the colonists who were sent there in Indentured Servitude hacked an existence out of the wilderness with their own two hands, bearing their children along the way. So the Dutch Bankers escaped with their gold to set up an econmy in South Africa, utilizing the local slave labor to dig for Diamonds, another accepted form of a rare item that can be used as a representation of wealth. So the Nazi Bankers were able to abscond with the Gold and head for Argentina, where they set up a new economy. Unfortunately, the actual natural wealth of Argentina has no diamonds and not that great land to support a population, but the South Africans were always able to trade out the Diamonds for food for their slaves.

Where will the bankers escape to this time with their Gold, and what neighborhood has enough growing resource of food to sustain itself without trade with another region of the old world sitll producing enough food to support them? There IS no such place left on Earth anymore. The Gold they bring won't help improve anyone's standard of living, there is no one left to trade it back to for any good products who would take it. The Ponzi scheme ends with the exhaustion of the earth itself to provide food for all the people.

The economics is abstract with the buying and selling and the betting process on growth, and the representation of monetary wealth through a rare product like gold, but in reality basic economics is very simple. It all depends on Savings for the Future, a betting game to make you secure in your old age. Social Security, Medicaire, these also were a Ponzi scheme, eventually they have to fail also as the society produces more people unable to produce either through age or poor health. Just this one is more obvious to many of you than the Banking scheme, and so the myth that the Market was the best place to invest in the future was accepted by some. It has to fail though when the society has more consumers than producers of wealth. That is obvious.

Anyhow, it seems to be something of a moot point with the collapse of the entire ecosphere. Just thought I would contribute another short synopsis of the economic side of World History

See you on the Other Side.

Reverse Engineer

[Snowrunner]

Interesting little side note, in Der Spiegel (German Edition) towards the end they mentioned that JPM would "write off" the 1.9 billion they "paid" for WaMu, guess another tax payer funded endavour like BearSterns.

At that rate the US Taxpayer is going to die the death by a thousand cuts.

[MattSavinar]

Roc posted an opinion that the 700 billion corresponds to how much money the primary dealers will need to buy Treasuries in 09 to cover the deficit. That will prevent a failed treasury auction.

If you take that as the true motivation for the bail out - because a failed treasury auction would be an A bomb - then there would be no point to having homeowners get bailed out if that would not, per se, allow the banks to buy the required treasuries.

If you think that the govt. line on the bail out is correct - that this is needed to free liquidity in the banks, then the question becomes do you inject the antibiotics into the swollen head or into the foot?

The head, is what they tell us, will work.

Link? Rocc - when he is on his meds - actually manages to pick his knuckles up off the floor, wipe the drool off the keyboard and post some really good stuff. This sounds like it might be one of those times.

[mklkatreeandleaf]

Rocc hasn't actually been wrong yet on anything I can think about, but suspending electios is a push for me, though he really could be right.

[emersonbiggins]

Oh noes, what will I do with the $13.63 in my account?




On this news, I'd say go long on vinyl banners, as these banks begin to play the name-changing game on their local branches.

*EDIT* What's to become of the WM's toxic, unloadable MBS debt?