Xantippa

Did the FDIC Sabotage WaMu's Management and Erode Investor Confidence?

Sufferingres. The bank run loss of $15 bill. in deposits was not caused by WaMu. Read the letter of the management to the customers on Monday 22. It was caused by rumours spred by media, and FDIC knew that as well.

If you don't smell any wishy-washy in this WaMu seizure operation, wellcome to the WallStreet. You will soon learn.

Did the FDIC Sabotage WaMu's Management and Erode Investor Confidence?

I see a bigger risk in creating again a so big financial institution - JPM - that cannot be let fail, but must be bailed out again on taxpayers' cost whatever their doings will be. WaMu - a trusted big bank of ordinary people - should have been helped out over this business cycle. All US banks are full of toxic mortgage loans in consequence of the governement policies - a house for each and every American people - so the banks are not the only ones to blame. They were feeded by "innovative financial products" from Wall Street, which were not clearly understood even there (re. Hank Paulson's comment).

This seazure of WaMu by FDIC and selling for peanuts to JPMorgan was an overhasted and not well thought operation.

Why did FDIC have only some $42 billion resources, if they have some 170 banks on their warning list? They should have raised their customer bank fees long time ago, when this crisis became imminent, to add their resources to face the savings bailouts from banks, which go bankrupt. WaMu was NOT near a bankrupt, and OTS (supervising WaMu) was not alarmed to warn FDIC. The initiative came from FDIC and JPM - and the speed of the action and the result of it seem extremely suspicious. This seizure process must be examined thoroughly before people can be convinced it was fairly done, both technically and morally.

Otherwise this single operation will further weaken American people's trust STRONGLY in their authorities. It can be felt everywhere.