Friday, September 26, 2008

Wamu goes down under

.

Considered to be the biggest bank failure in American history, WaMu (Washington Mutual Bank) the FDIC claimed WaMu's assets and then sold most of the companies to JP Morgan, now the second largest bank in America. The fall of the bank is due to several factors. After the fall of The Leham Brothers, WaMu customers withdrew earnings approximating 16.7 billion dollars in a ten day period. The panic and uncertainty which caused this massive money withdrawal, left Wamu unable to liquidity their assets.

In the long run, WaMu's failure was due to the mismanagement and misinformed bets on the mortgage market. Due to their risky debts and tumbling mortgages, JP Morgan has dropped the loan portfolio to 31 billion. This however can change if the company decides to take advantage of the bailout IF it goes through.

For current WaMu customers, you are still able to resume regular banking. According to Shelia Bair, (FDIC chairman) what this means for customers is the combination of two banks.

For an in depth article on WaMu's fall, read article

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Kavita (luvikavi)
I am a 25 year old loud mouth by my words yet soft spoken at heart. I have love affairs with new thoughts, ideas, controversies, movies, news,helping those in need and politics. If something tickles my fancy, I will blog profusely about it. The world is filled with nonsense, and writing helps me grasp the reality, whatever that may be.
I graduated from Northern with a Bachelors in Health and Human Sciences, with an emphasis in family and individual development. I hope to GOD my thousand and thousand dollars in loans has prepared me enough for Grad school which I will be venturing off into this Fall of '10. YIKES!
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