It always amazes how calm and self assured news journalist are when commentating about the collapse of the 2nd largest Bank in U.S. history. And the sheer fact that many will lose a considerable portion of their life savings.
The economics correspondent makes reference to the Massive losses (on the stock market) by Washington Mutual and National City bank. Washington Mutual alone lost 34.8 (Monday July 14,208)
So one has to ask , what's next? considering the massive losses by Washington Mutual, I will refer to an Article by Jonathan Stempel (REUTERS) SEPTEMBER10,2007 quoting WASHINGTON MUTUAL INC. "Washington Mutual Inc said on Monday that most U.S. housing markets are weakening, creating a "near perfect storm" that may force the largest U.S. savings and loan to set aside more money for bad loans". Well that has obviously happened, which is why there was such a run on INDYMAC because of their staggering default rates on the loans packaged by the company.
SO is WASHINGTON MUTUAL next? David Goldman from CNNMONEY writes "WaMu responded after the market close with a statement, saying it is sufficiently capitalized, with more than $40 billion in excess liquidity after it recently raised $7.2 billion in capital.
That statement is nearly identical to the statement made by INDYMAC before their collapse.
I closed my account with WASHINGTON MUTUAL over a year ago, so none of this surprises me.
Regarding INDYMAC, I was becoming so frustrated by the outright Blackout with video and photo footage of INDYMAC depositors, that I drove to an INDYMAC branch to take photos of the bank run. The photos were taken July 14,2008 4:40PM, The Indymac branch is Located on 2090 S. ATLANTIC BLVD MONTEREY PARK, CA
1. In these photo you can see everyone standing aloof.
2.The line continues past other business
3.The Line further continues into the sidewalk
4. Line continues further onto sidewalk
I sincerely hope that some people take appropriate and reasonable actions to mitigate the financial impact.
1.Jonathan Stempel"Washington Mutual sees more 2007 loan losses"Mon Sep 10, 2007 2:21pm EDT REUTERS.com
2.David Goldman "WaMu and National City plummet
Shares of the two troubled banks each plunge about 30% as investors fear the possibility of more bank failures"July 14, 2008: 4:41 PM EDT CNNMONEY.COM
UPDATE JULY 19, 2008
Many former INDYMAC customers are being deferred (Declined) at various branches when attempting to deposit their "insured checks" given to them by the FDIC owned INDYMAC
Why would banks decline a check issued by the FDIC considering they are supposedly as "good as gold". In an excerpt from the WSJ, Micheal Crittendan states "The country's largest banks, particularly those more likely to fail, will have to make changes to the way they treat deposits, as federal banking regulators prepare for more trouble in the struggling banking industry". More specifically the regulations will require banks to standardize accounting methods for deposits, Crittenden further writes "The FDIC said the rules for big banks, which take effect Aug. 18, will "mitigate the spillover effects of a failure, such as risks to the payments system, problems stemming from depositor illiquidity and a substantial reduction in credit availability". Is this the reason why some banks are not accepting FDIC checks? I cannot say for certain, but nonetheless it is a cause for great concern, and a time for appropriate mitigation actions for others who do not wish to stand in line for hours and possibly days to extract their deposits.
Andrea Chang,"Waits improve at IndyMac bank branches" Los Angeles Times
10:20 PM PDT, July 16, 2008
Michael R. Crittenden "FDIC Issues New Deposit Rules for Big Banks" July 18,2008
(LINK TO FULL ARTICLE FOR NON-WSJ SUBSCRIBERS)