An Old-Fashioned Run on a Bank

[Beavah]

WASHINGTON (MarketWatch) -- Washington Mutual customers withdrew $16.7 billion in cash from the thrift in the past nine days, a huge outflow that led to the largest bank failure in U.S. history, the institution's regulator said Friday.

 

The withdrawals were largely concentrated among retail deposits that were over the Federal Deposit Insurance Corp's $100,000 insurance cap, said Tim Ward, the Office of Thrift Supervision's deputy director for examinations, supervisions and consumer protection.

 

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Yah, wow. Never thought I'd see an old fashioned run on a bank take out a big bank in my lifetime.

 

B

 

[Nike]

You used to have to actually "run" to the bank. I bet all this activity was via EFTs.

[TheScout]

Bad banks with not enough reserves should fail. It should serve as a lesson to other banks to make better business.

[Trevorum]

I didn't bother to run at my WaMu branch.

 

It'll be awhile yet before my account reaches 100G ...

[packsaddle]

Watch Wachovia, they're also upside down.

There are even more out there.

[packsaddle]

Citigroup just bought Wachovia banking operations for $1 per share. I'd like to have a taste of that action.

[scoutingagain]

"Citigroup just bought Wachovia banking operations for $1 per share." ...

 

And will get to shed the bogus loans that got them into trouble to us the taxpayers or have us insure insure the bad loans. Either way we have volunteered through our elected officials to offer massive risk mitigation to the private financial sector.

 

As has been said. "What a country!"

 

SA

[Gunny2862]

And wasn't taking on the insurance against bad loans over and above bad or loose choices made by the primary banks the job and, indeed, business activity of AIG? Again, Insurers who failed to retain enough assets to pay possible losses. >

[SMT224]

Here's what to do - give everyone $200,000.

 

This adds up to $600 billion. This will solve our immediate problem because we can all pay off credit card debt, mortgages and infuse cash into the economy. This is far better than $700 billion going right into failed bankers pockets.

[packsaddle]

A Trillion (with a 'T') dollars of wealth went away yesterday. Paying the piper, so to speak. Thing is, we still owe the full amount of the national debt.

[SMT224]

This whole thing reminds me of the beginning of the Iraq war - the Bush administration told us that we had to act fast because Iraq had weapons of mass destruction that could be used at any time so we had to move immediately -- and we trusted and bought what very soon turned out to be total BS. Now, we are told that we have to act fast because terrible things will happen unless we give them $700 billion immediately. Trust us they say. Accountability? No time for that they say, just give us the money. Money that will be used to prop up failed institutions and ensure millions in golden parachutes.

 

Fooled me once, shame on you. Fooled me twice, shame on me.

[Gold Winger]

I like the idea about giving everyone $200,000. You're right. I could pay off everything I owe. Buy a new car. My kids wouldn't have to borrow for college. Heck, I'd even buy some new Scout pants.

 

SMT224 for President!

 

It just occurred to me that if everyone suddenly had 200 grand, there'd be some incredible inflation.(This message has been edited by Gold Winger)

[packsaddle]

If there was a budget surplus large enough to give that $200K, I'd be sympathetic. There isn't. There WAS a surplus and it wasn't used to pay down debt. To make such a deal today you'd be robbing future generations as surely as we will be with the proposed bailout. And I would not support that. Rather it is time for everyone to face up to their responsibilities.

[SMT224]

Packsaddle - I agree with you 100%. The problem is, they are going to drop a huge amount of money to try and fix this, be it $700 or $300 billion. The question is, how best to spend that money? I am not feeling comfortable dumping it into the existing system that is clearly a failure.

 

GW - Thanks for the endorsement! I think I'd end up re-arranging government as a Scout Troop!

 

 

[BulldogBlitz]

200k per person? which 3 million people will get that?

 

i can say that being down here, when fema gave out debit cards, the things that were put on those fema cards weren't necessities - unless strip clubs, flat screen tvs, and cruises are considered necessities. give 200,000 to most of the affected people and you'd end up with the same thing - people buying things they don't need. until very recently, i was in that prime target market for WaMu and others that were encouraged to offer loans to people who shouldn't be getting loans. I didn't take the offer though. I am less than interested in paying for someone else's poor judgment (the banks who broad brush accepted anyone who'd sign on the bottom line...and the debtors who thought 30,000 a year was good enough to afford a 200,000 house).