Source: The Stranger
Synopsis:
“Time to Panic” segment
- Washington Mutual faces buyout by J.P Morgan, Wells Fargo, or other larger financial corporation.
- Stock hovers around $2.99 which is a fraction of its 2007 value.
- According to article, banks tend to keep 1/10 the value of any given bank account in cash assets. The rest is loaned out. The operating assumption of any bank is that all customers will not draw upon their cash at once.
- Federal regulations only allow banks to invest in high-rated debt.
- Previously, getting a mortgage loan required giving a lot of information to a lender, so as to accurately and precisely calculate the risk of the debt. During the housing bubble, lenders became more lax in gathering information, and thus made loans to higher-risk borrowers that were, on paper, “highly rated”.
- Up to $100,000 per each account (and beneficiary thereof) is insured by the FDIC. The FDIC is backed, at heart, by the taxpayers themselves.
“Good-bye to You, WaMu” segment
- WaMu’s bank accounts have differing amounts of digits depending on state, creating problems.
- Company has dumbed down its marketing, which is insulting to many patrons.
- Bank manager virtually harassed customer who wanted to close out an account, given WaMu’s precarious position in the market, calling their decision an emotional one and downplaying news of WaMu’s troubles. Author assumes her gender prompted manager to take this patronizing approach.
- Author took money to Bank of America where the employee claimed to have gotten $1.4 million in new accounts in a single day as a result of WaMu stock “tanking”. Employee waived author’s fees “forever”.
