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518031 tn?1295575374

Washington Mutual Bank

sorrey but has to start this neew question.. i am sure where u all saw where this bank collasped last night .there stock price went from close to 40 dllaors a share to ZERO last night... they had arun on the bank and ppl withdrew over 16 billion dollars in cash out... that is what caused the collapse.. they were worried about their money which they should have.. when the stock tanked they got there cash.. well what really pisses me off was the CEO of the bank just took over 17 days ago.. JP morgan made a deal and bought the bank last night.. the board voted that the ceo got a severance package worth about 18 milliuon dollard??? he was paid almost a million dollars a day for his time there to watch the bank go belly up and anyone who owned stock lost everything.... just unreal, and ppl wonder why the country is in financial trouble.. please give me ur thoughts
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535822 tn?1443976780
Well they now own stock in JP Morgan,  they didnt lose it, but I know what you mean ,whats next? are you going to watch the Debate tonight I hear McCain will be there.They still havent cut a deal either.
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518031 tn?1295575374
from what i understand the ones who owned stock lost it all because the bank collapsed before it was bought.. i just heard the story on the news thats why i started this thread.. maybe i didnt understand what i heard
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535822 tn?1443976780
I could be the one who got it wrong I will listen again tonight hey how did you like the debate I was surprised John McCain did so well and Obama picked up after a while it was good I enjoyed it.
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518031 tn?1295575374
it was ok they both started off badly, i am not a big fan of either, i am a registered repbulican and i think i will vote for mccain but neither empress me.. i dreally dont think or i hope that they arent the best the country has to offer
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535822 tn?1443976780
I totally know what you mean I liked what Mc Cain had to say he gives me more confidance but I am a Democrat and I wanted Hillary in so I have a Dilemma now.
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389974 tn?1331015242
The bears have been announcing the collapse of WAMU for nearly 8 months now.

Many banks are going to either fail or merge before this is over. Just today, Fortis is gone, Wachovia is trying to find a buyer (and may have in Citigroup), and Bradford & Bingley will be protected by the UK treasury.

It is interesting but the WAMU buyout was negotiated at no cost to the US government. This suggests it had money, but it had no capital to continue business.

There is now low enough confidence in the financial system that any visible bank could be subjected to a panic attack.
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460185 tn?1326077772
Swampy - I'm Canadian and don't know a lot about your policies and issues - like what is WAMU?  Is this similar to what happened in 1929?


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228686 tn?1211554707
WAMU is Washington Mutual Bank. They have those great commercials with the guy talking to all the corporate suits grouped in a corral/pen?

We haven't quite reached the economic crisis of 1929. We've got an erosion of confidence over here and large institutions are going under...but we haven't gotten the run on the banks, markets, etc... that would cause a sudden collapse of the economy...yet.

That's why this buyout is crucial. AIG in itself is totally unimportant in the grand scheme of things. Under normal circumstances its collapse would be just an inconvenience to a small group of people (compared to the overall population).

Other businesses would replace them in the marketplace.

The problem is actually one of Faith. A large  part of economic health is tied up in consumer faith in the economy/system. When you get a poor economy that leads to a number of large businesses going under, that succession of  collapse can cause people to panic. They stop spending, hold onto their money, and worse, very rapidly pull their cash out of the economy (banks, stocks, etc) in an attempt to liquefy their assets and get cold hard cash in hand.

But here's the catch; there's only so much real cash flowing in the economy. So eventually the banks have to stop paying out because they don't have the federal notes. Plus, a great deal of capital is just "numbers"...and those numbers are in continuous flux to offset the large debts/loans these companies have. When that flux runs all in one direction, it all collapses.


All right swampy, I stole your question and I've got a feeling I made a hash of it (never discuss economic theory after midnight). Maybe you can clarify it.
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389974 tn?1331015242
Swampy mostly agrees, but wants to comment a little more on AIG.

AIG was not just a an isolated insurance company, it also had extensive operations in Asia. As an example, it held 12% of all bonds issues byt eh government of Taiwan.

It also owns a great number of commercial aircraft . Changes are, when you take a United, or American, or Delta flight, that plane is owned by AIG.
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