Modern Bank Runs

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.
http://i267.photobucket.com/albums/ii316/imuman/PICT1302.jpg

2.The line continues past other business
http://i267.photobucket.com/albums/ii316/imuman/PICT1284.jpg

3.The Line further continues into the sidewalk
http://i267.photobucket.com/albums/ii316/imuman/PICT1292.jpg

4. Line continues further onto sidewalk
http://i267.photobucket.com/albums/ii316/imuman/PICT1287.jpg


I sincerely hope that some people take appropriate and reasonable actions to mitigate the financial impact.

Sources:
1.Jonathan Stempel"Washington Mutual sees more 2007 loan losses"Mon Sep 10, 2007 2:21pm EDT REUTERS.com
http://www.reuters.com/article/bondsNews/idUSN1030940720070910

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
http://money.cnn.com/2008/07/14/news/companies/washington_mutual/index.htm?po...


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
http://www.latimes.com/business/la-fi-indymac17-2008jul17,0,2003956.story

Michael R. Crittenden "FDIC Issues New Deposit Rules for Big Banks" July 18,2008
http://online.wsj.com/article/SB121632439187562885.html

(LINK TO FULL ARTICLE FOR NON-WSJ SUBSCRIBERS)
http://boombustblog.com/content/view/471/34/

Enjoy!!!

Category:

News & Politics

Tags:

• Commentary
• Analysis
• INDYMAC
• bank
• runs
• Washington
• Mutual
• FDIC
• Financial
• Systemic
• failure
• What's
• Next?

[danpauselius]

The Indymac run cost the FDIC 10% of its capital reserves. How many more banks can the FDIC really cope with before they run out of liquidity? FDIC asked for a 300% increase in capital reserves 6-12 months ago, I'm not sure if they ever got it.

[StandardJohnDoe]

Please cite your source (and provide a link if possible) , I would be very interested in reading the material.

[mrfunnyman99]

The Feds new policy, "no billionair left behind"

[Jackinape]

Everything is fine,The economy is in great shape.Drink another beer take another pill.

Go back to sleep sleep,sweet dreams.

[Marblemania]

Good deal. Banks going under. They have stolen from the people long enough. Time for the US to get back on the Gold Standard and get rid of the Zionist bankers grip on our country.

I haven't done business with a bank for over 15 years and find I have More Federal Reserve toilet paper now than ever.

[TheShockmister]

How funny this seems now. LOL

[sha370z]

Washington Mutual NO Problem Here ? sep 25 2008

[MrHarry46]

the worst safety issue American face is the fake "us dollar" isnt even a United States Dollar at all....its a weak british "federal reserve note" owned by the rothschilds of england. dont believe me? pull your dollar out and look at tit . up at the top. FEDERAL RESERVE NOTE. IT IS NOT A UNITED STATES DOLLAR. federal reserve bank is a private corporation owned by the rothschilds of england(bankers, est worth 500 TRILLION, Owners of the federal reseve bank of the USA) WAKE THE FUCK UP AMERICA

[ToxicOdiousOne]

Mortgages are worth nothing because the dollar is worth nothing backed by no commodity.

[inkey2]

@TheCashistrash my late father who lived through the great depression (he died 10 years ago at 83 years old) alway spread out his savings out in different banks (under the $100,000 deposits)......he lived through the first depression and learned a good lesson

[TheObserver2012]

FDIC is just as good as the Government? Who is that white old fool kidding...

[andrewrosso]

@simonbayes1 owners cant there two differnt legal persons.

and the owners dont have the money to pay or else they would have

[EMPIRE0FLIES]

And right after this WAMU went under. Ya the fed will back your money. Just let them warm up the printing press.  Wakup people.

[TheCashistrash]

poor man who lost over 60 thousand dollars. that is about a quarter of his life savings and all due to greedy bankers. that man is old and is going to be difficult to recover.