usa finances

Sep 26, 2008 02:33

so, uh, my bank failed. yeah, yeah, fdic (thank goodness). my money is safe. but damn. my bank failed ( Read more... )

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Comments 12

kaygigi September 26 2008, 12:38:38 UTC
Fannie Mae and Freddie Mac only do mortgages. They were supposed to be subprime lenders because they administer gov't backed homeownership programs for low-income folk. The problem is that they make the loans, then sell them to established banks, and when those banks got too greedy and the subprime crisis hit, FM/FMc could no longer sell the debts and needed to be bailed out. They also administer Small Business Association loans and other subprime commericial loans ( ... )

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starfrosting September 26 2008, 17:47:16 UTC
wow, your bank, this is micro- and macro-economically scary. a friend of mine just made a really good post you might want to check out:
http://kerrickadrian.livejournal.com/90585.html?view=658649#t658649

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strauss September 26 2008, 18:46:36 UTC
i'm not allowed to view that protected entry! boo.

but yeah, my savings account was with wamu.

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starfrosting September 26 2008, 18:53:00 UTC
oops, sorry. he made the "why don't we try giving this huge bailout package to normal citizens instead of to the people who got us into this mess" point, and said some really smart stuff about ecology, and the interplay between economics/apocalypse/ecology worked for me.

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ohanawa September 26 2008, 18:33:51 UTC
Mine just failed too. Washington Mutual. My grandma has been all anxious because she thinks the FDIC only insures up to $100, even though I keep saying, "grandma, that's $100,000, not $100!"

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strauss September 26 2008, 18:45:49 UTC
yeah, mine's wamu too. i'm just glad that's my savings account, not my checking (which is at commerce bank. and to think i almost switched my checking so it would all be at the same bank!!). this way, i can wait to figure out the fdic stuff until it calms down a little. my savings may be closer to $100 than $100,000, but i'm just relieved it's safe.

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deciphering_me September 27 2008, 03:02:17 UTC
...and depending on the titling of accounts a person could be insured for a lot more than $100,000. I was working on some calculations for my boss today to figure out how much a customer could have covered and determined that a married couple with 4 children can be insured for $1.4 million in one financial institution if they use their children as beneficiaries on one of their accounts. Oooh the banker in me is coming out again. =P

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zevshir September 27 2008, 02:44:26 UTC
whoa. scary. does this mean i should be taking my savings out and hiding it under the mattress?

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mattio September 28 2008, 14:36:40 UTC
wamu didn't fail - a deal was brokered so that JPMorgan/Chase would buy it for something like pennies on the dollar - assets, debts, and all.

FDIC stuff is fairly reliable, though if Lehman and WaMu had actually failed at the same time, FDIC would have been very strapped indeed to cover their accounts, and could have crashed. No wonder they were so quick to broker a deal.

the very weird part of this whole financial mess, for me, is learning about Credit Default Swaps.

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kaygigi September 29 2008, 16:13:12 UTC
JPMorgan tried to buy WaMu in July for multiple times what they ended up paying for it. If they were really just trying to broker a deal to get WaMu on the super cheap, they wouldn't have made the offer months ago for much much more. WaMu and Lehman made the same mistake: refusing take-over offers when the companies weren't failing. Barclay's offered in August to take over most of Lehman; Lehman refused and a bit over a month later, was wiped out. JPMC tried for WaMu in July, but WaMu refused; two months later, WaMu did, in fact, fail. Unlike Lehman (which as an ibank is subject to different regulations and is NOT covered by the FDIC), WaMu was shut down by the government BEFORE it was allowed to completely go bankrupt; at some point, when a Savings and Loan bank can only cover a certain percentage of deposits, the government will step in and shut down the banks. This is what didn't happen in 1929, leading to a rush of people withdrawing money and creating utter collapse. Thanks to the FDIC's actions, that scenario didn't ( ... )

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mattio September 30 2008, 02:36:43 UTC
fail, yes. but crash and burn and you wake up one morning and there's a "closed for good! oops for your money!" sign on the door of all thirty of your local WaMu branches, no.

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