Chase Acquires Parts Of WaMu, Bullet Dodged
September 25th, 2008
Well, WaMu went under but it looks like disaster was narrowly avoided – instead of the FDIC having to take over the whole shebang like IndyMac, resulting in long, annoying lines, as Joe Average pulled money out of the bank en masse, JPMorgan Chase has swept in to acquire all the deposits, bank accounts, and customers.
What Washington Mutual Customers Should Know and Do
- Feel confident that their deposits are secure
- Continue banking as you have – assured that your bank is now backed by the strength and security of JPMorgan Chase
- Continue to use the same checks. All checks will be processed as usual
- Continue to use the same account numbers
- Continue to use the same ATM card and credit card
- Continue to use the same ATMs
- Continue to use the same branches
- Continue paying your mortgage and credit card as you have. Checks should be made payable the same as they have been in the past, and payment addresses remain unchanged
- Continue using the same contact phone numbers, online service and websites
- Know that you will learn well in advance of improvements, additional conveniences and other changes
While I’m glad to see the promise of business as usual, I’m still glad I set up a back up checking account elsewhere. While once the rule of diversification applied to different asset classes, it now seems that advice holds to different financial institutions – including some cash in your mattress. I’m totally serious about that last point. When your bank fails, you don’t want to be stuck in line with other schmoes, It’s A Wonderful Life style.
So anyhow, while the politicians mess around and play stupid election games, the financial world is collapsing all around them. This depressing roller-coaster ride isn’t over by a long shot.
Update: It’s now being reported that part of why WaMu went under was a good old fashioned bank run:
But the Office of Thrift Supervision said “significant deposit outflows” began on Sept. 15. “During the next eight business days, WaMu deposit outflows totaled $16.7 billion”…
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My sister called last night somewhat panicky — b/c she has a lot of funds at WaMu. Fortunately, I told her, JPMorgan had stepped in to assume the deposits, and even then she would've been FDIC insured (knock on wood that the feds don't shirk on that ever!).
Still…it made me think back to your prior post about removing the money. I personally would've removed my money as well. Even if the bank run caused the ultimate collapse, the fact of the matter is that confidence in WaMu was shattered in the marketplace and among its account holders. If you've lost confidence in your bank, you gotta do something! As so much of the current financial crisis reveals — ain't nobody gonna help you out in these scenarios. The small guy will get screwed regardless (the fat cats of course will get bailed out).
Yeah, luckily chase stepped in, which should mean a smooth transition. But
the thing I was nervous about was the bank failing and the FDIC taking over.
Not loss of money (we had much less than 100K in there) but just the hassle
of deposits being frozen for a few days or even just people lining up
outside their local branch to get their money out as was the case with
IndyMac.
Although all of that may not have happened, I still think it was good to be
proactive rather than reactive in this case.
[...] an retarded ostrich could ignore the financial crap raining down, and due to my WaMu scare I’ve been pondering my dependencies on corporations in general. Things are unwinding quickly, [...]
[...] It may seem from recent posts that I’m a pessimist, but I follow the old adage of “hope for the best, but prepare for the worst.” This is not a doom-and-gloom perspective – I don’t hope the financial world collapses into chaos and we all run for the hills, gold and shotguns in hand. Rather, I find it empowering to research the worst-case scenario, and comforting to be prepared so you’re ready for anything. And then when the “best” or even the “average” happens – you can appreciate it that much more. [...]