tomhanks

WaMu on the Brink

Banks that are in need of liquidity (deposits, for example) offer high interest rates. Strong banks do not compete for retail deposits because they don't need to; weak banks often do. Banks may also need to offer high rates because they have a material amount of CD's (that they offered to customers) that are maturing and they don't want to lose the deposits - again, usually because they need the liquidity.

WaMu on the Brink

Actually, WaMu is not on the list of 117 institutions. The sum total of assets of all institutions on the list is less than $100 billion. Both WaMu and National City individually have more than $100 billion in assets, so neither could possibly on the list.

WaMu’s Cards: Restructuring Is About the Only One Left

Not a bad blog, actually. CDS spread are interesting but not particularly relevant. WaMu hedges its MSR but other than that does not have much need for counterparties of any sort. With that said, WaMu could fail and fail quickly if there is a run by depositors. Without that, there is ample liquidity to survive. Capital, however, could be a medium term problem. The TPG anti-dilution provisions are quite onerous. Any new capital raise would be prohibitively expensive; regulators would have to step in and arrange a deal. Result would be total loss for non-institutional equity holders.