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New York - America In Crisis, Washington Mutual Could Be The Next To Collapse. FDIC Funds Dwindling

Published on: September 17, 2008 10:25 AM
By: NY Post
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New York - The fate of Washington Mutual remained in question yesterday as federal regulators recently called a number of banks asking if they would consider buying the nation’s largest savings and loan should it eventually falter, sources told The Post.

In recent days, federal banking regulators have reached out to Wells Fargo, JPMorgan Chase, HSBC and several other financial institutions to gauge their interest in a possible acquisition of WaMu, but no merger discussions are currently under way between the Seattle-based bank and anyone else, sources said.

The move comes as investors worry that WaMu’s customers could begin pulling their money, which totals about $143 billion, out of the bank should its stock fall further.

That doesn’t appear to be happening now, but several WaMu customers in the New York area told The Post yesterday that they were worried about their cash.

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“Should I be in panic mode?” asked one Brooklyn-based customer who recently bought a $250,000 13-month CD from the bank.

At the end of June, WaMu customers had 42.4 million accounts, almost all with less than the federally insured maximum of $100,000.

WaMu’s shares traded down as much as 25 percent yesterday before rallying to end the day up 16 percent to $2.32.

Standard & Poor’s cut WaMu’s credit rating to junk status late Monday citing “increasing market turmoil,” but at the same time acknowledged that WaMu’s deposit base appears to be stable and the company has enough liquidity to meet all fixed obligations through 2010.

Rumors about a pending takeover by JPMorgan also resurfaced yesterday, but sources close to both companies said no talks are happening.

WaMu’s deposits could buy the company’s new boss Alan Fishman time to seek a deal or more capital should it lose more on bad mortgages than expected.

In April, private equity giant TPG led a group of investors that pumped $7 billion into WaMu.

TPG invested a total of about $1.5 billion into the company at an average price of $8 a share, according to a letter to the firms’ investors obtained by The Post.

Those investors are unlikely to take a loss and would want JPMorgan or any other buyer to pay at least $8 a share before they accept a deal, sources said.
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AP
Banks are not the only ones struggling in the growing financial crisis. The fund established to insure their deposits is also feeling the pinch, and the taxpayer may be the lender of last resort.

The Federal Deposit Insurance Corp., whose insurance fund has slipped below the minimum target level set by Congress, could be forced to tap tax dollars through a Treasury Department loan if Washington Mutual Inc., the nation’s largest thrift, or another struggling rival fails, economists and industry analysts said.



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Read Comments (26)  —  Post Yours »

1

 Sep 17, 2008 at 10:38 AM Anonymous Says:

Welcome to the new Corporate Socialism. That's what "deregulation" gets you -- for regular folks, your on your own, but for large companies that mess up, the government will come to the rescue -- with your and my tax dollars.

2

 Sep 17, 2008 at 10:44 AM Oy Gevald Says:

Should he panic? Of course not! Get in there TODAY and transfer the big money CD into smaller ones of less than $100,000.00. That way your money is guarantted by the federal government. No one is safe anywhere.

3

 Sep 17, 2008 at 10:45 AM nchemye farnuminer Says:

I heard that the 100,000 that the fdic insures in the fine print it sayes that they can pay it out in 100 years does anyone know if that is true ? if it is true then you have to be carefull with even less then 100,000

4

 Sep 17, 2008 at 10:54 AM Anonymous Says:

I'm still trying to decide if I should close my wamu accounts. On one hand it is insured on the other hand how is the FDIC continue making payouts when it's account going low.??? I might just end up ride it out and pray that everyone survives this financial storm.

5

 Sep 17, 2008 at 11:20 AM Anonymous Says:

Oy gevald, nothing is guranteed , not even the federal government. this whole fiasco is a huge mussar. with these Wall Street big wigs thinking they are safe and secure, in 1 minute God can turn things around and make them pennyless. God can do the same thing to the US goverment and making this gurantee of less than 100,000 a drwam. he can turn the US government into the poorest country on earth with the blink of an eye. So dont anyone think for one moment that because they are worth millions they are safe. History has proven otherwise.

6

 Sep 17, 2008 at 11:36 AM Anonymous Says:

I would take my money out of washington mutual now..You have to be blind not to see whats comming

7

 Sep 17, 2008 at 11:32 AM Use your head Says:

After seeing WaMu's absolutely absurd marketing and advertising over the past two years, it was obvious to me that they were going off the edge of the cliff.

8

 Sep 17, 2008 at 11:30 AM McCain - Pailin in 08!! Says:

dont worry about the bank, WORRY ABOUT THE USA IF THE DEMS ARE ELECTED.

9

 Sep 17, 2008 at 11:29 AM Anonymous Says:

We will just have to get used to the idea that we are not living in the richest country any more.

10

 Sep 17, 2008 at 11:44 AM Genius Says:

We should all take our money out & put it under our bed - thats the safest place now!
(I would too but I have none left.)

11

 Sep 17, 2008 at 11:51 AM Murray Says:

WAMU will surely fail now, even if it wasn't going to fail. That is the power of opinion, and the printed word. A "run on the bank" situation will kill any bank.

12

 Sep 17, 2008 at 11:57 AM deepthinker Says:

AMERICA HAS WORSHIPPED MONEY FOR TOO LONG, AT THE EXPENSE OF DECENCY AND VALUES.

NOW, THIS IDOL, TOO, WILL COME CRASHING DOWN, LIKE ALL THE OTHER IDOLS THAT WENT BEFORE.

13

 Sep 17, 2008 at 11:57 AM Anonymous Says:

Oy Gevald Says:
comments - arrow Should he panic? Of course not! Get in there TODAY and transfer the big money CD into smaller ones of less than $100,000.00. That way your money is guarantted by the federal government. No one is safe anywhere.

**************************************************

This is a serious situation and if you have no idea what you are talking about, please don't say anything.

The FDIC will insure up to $100,000, period.

If you have 10 CD's of $100,000 each and the bank goes under, you get $100,000.

If you have 10 CD's of $100,000 in 10 different banks, and all 10 banks go under (less likely) you still only get $100,000.

So please, don't mislead people by your misinformation, however well intentioned.

14

 Sep 17, 2008 at 12:07 PM deepthinker is right Says:

yes, but not before all of our evangelical christian "friends" try to first convert us and then blame us for this country's money woes.

scary.

15

 Sep 17, 2008 at 12:17 PM Reb. Aron Zalmen Leib SHLIT"A Says:

MY advice to you is....... Get your money out and put it into a GAMACH that is doing CHESED all the time, its the only safe place because you are putting it into Hashems hands.

16

 Sep 17, 2008 at 12:34 PM Anonymous Says:

Deposits in separate branches of an insured bank are not separately insured. Deposits in one insured bank are insured separately from deposits in another insured bank.

I just got this off the FDIC website

17

 Sep 17, 2008 at 12:39 PM puppydogs Says:

The FDIC insures accounts at different banks separately. For example, a person with accounts at two separate banks (not merely branches of the same bank) can keep $100,000 in each account and be insured for the total of $200,000. Also, accounts in different ownerships (such as beneficial ownership, trusts, and joint accounts) are considered separately for the $100,000 insurance limit

18

 Sep 17, 2008 at 12:48 PM Anonymous Says:

My mortgage is with WAMU does that mean if they collapse I won't have to pay it any more?

19

 Sep 17, 2008 at 01:04 PM miamiyid Says:

we're in a depression ... just wait you'll see people jumping from buildings

20

 Sep 17, 2008 at 12:53 PM Gimple Says:

but if the Federal goverment is out of money so are you

21

 Sep 17, 2008 at 12:53 PM Anonymous Says:

to anon 12:48
You don't want to have pay your mortgage and yet if you have any money/savings with WAMU you want to make sure you'll get that back...

22

 Sep 17, 2008 at 01:29 PM mi yaiuni umi yaiusher Says:

Henny Penny, the sky is falling!

23

 Sep 17, 2008 at 01:52 PM Anonymous Says:

==========This is a serious situation and if you have no idea what you are talking about, please don't say anything.

The FDIC will insure up to $100,000, period.

If you have 10 CD's of $100,000 each and the bank goes under, you get $100,000.

If you have 10 CD's of $100,000 in 10 different banks, and all 10 banks go under (less likely) you still only get $100,000.

So please, don't mislead people by your misinformation, however well intentioned============

Wow, my irony detector just blew a fuse! Thanks for the laugh brosef!! Why not head over to fdic.gov and check just how off the mark you are. Hint: you're wrong.

24

 Sep 17, 2008 at 04:04 PM political analyst Says:

you may have more insurance or less insurance than you think you have.
to deterine what coverage you have by the FDIC, follow this very useful link
http://www.fdic.gov/edie/calculator.html

25

 Sep 17, 2008 at 04:40 PM Gefilte Fish Says:

Check it for your self.

http://www.fdic.gov/deposit/deposits/insuringdeposits/index.html

Basic Insurance Amount Is $100,000
The basic insurance amount is $100,000 per depositor per insured bank. Certain retirement accounts, such as Individual Retirement Accounts, are insured up to $250,000 per depositor per insured bank.

If you and your family have $100,000 or less in all of your deposit accounts at the same insured bank, you do not need to worry about your insurance coverage -- your deposits are fully insured.


26

 Sep 18, 2008 at 08:03 AM Moshe leib from Williamsburg Says:

I took out every nickel from Wamu yesterday. The Washington Mutual bank in willy had a long line of chassidim all closing up and withrawing their money from accounts...So Raboisa have seical

27

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