Money
Dear Dan, Bethany, and Jonathan Golob
You all should be deeply, deeply ashamed:
“Withdrawals by customers ultimately sank WaMu”
It’s your fault!
You all should be deeply, deeply ashamed:
“Withdrawals by customers ultimately sank WaMu”
It’s your fault!
Comments (26)
"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." - doesn't sound like most slog readers to me...
Posted by Steven Miller | September 26, 2008 9:25 AM1. Financial troubles come to light.
1a. Bank shows they have deposits to withstand 2-3 more years of ill fate.
2. However, media creates panic to sell copy.
3. Panic leads to depositors raiding bank and closing accounts.
4. Raid creates dramatic loss in deposits, crippling the bank.
5. Insolvency.
So actually, yeah, the media had a strong hand in WaMu's failure by panicking the masses. Way to go.
Whether or not they were influenced by the Feds to do so for other reasons may never be known. But before the precipitous drop, they had the capital to last until 2010 if nothing changed for the better.
Posted by Gomez | September 26, 2008 9:25 AMGomez, the belief in credit rating agencies had more to do with it than the news media simply reporting the downgrade to junk status.
Posted by Bellevue Ave | September 26, 2008 9:30 AMAt least we won't have to watch those goofy commercials anymore. WaMooooooooo!
Posted by Cat in Chicago | September 26, 2008 9:30 AMI know I moved some out of my WaMu account, in case they screwed up and cut off access to my money while they were selling off their Aeron chairs down on 3rd ave.
But yeah, @1 right on, to be completely accurate and un-snarky.
Posted by poo | September 26, 2008 9:32 AM@5 you did this because of Golob's warnings, right?
Posted by chet. | September 26, 2008 9:34 AMThis is like blaming escaped passengers for the Titanic sinking. Because, they could've stayed on the ship and helped bail water, right?
Posted by Mahtli69 | September 26, 2008 9:37 AMIt's McCain's fault for scuttling the bailout plan yesterday.
Posted by David | September 26, 2008 9:42 AMsmart paranioids switch to credit unions: https://www.smcu.com/promos/secure_deposits.html
Posted by uncle baggy | September 26, 2008 9:42 AMLook, you can't blame Golob for pointing out that the prisoner's dilemma works.
Posted by Greg | September 26, 2008 9:46 AMI loved that throughout the last two weeks WaMu didn't add any sort of reassuring messaging to their website, or anywhere for that matter. What I loved more: That BECU did.
*high fives w7ngman
Posted by w7ngman fan | September 26, 2008 9:48 AMWaMu was totally inactive on combating rumors and press until it was too late. As 11 points out, even when they did try and react to the media they didn't do it effectively. They did post things on WaMu's site, but it only showed up after you logged in and then went back to the main page. Very few people would do such a silly thing. There were more than a handful of employees who expressed their concern to sr. management that we weren't being aggressive enough in our PR efforts, but owell.
Posted by WaMu's PR Failure | September 26, 2008 9:58 AMWaMu was totally inactive on combating rumors and press until it was too late. As 11 points out, even when they did try and react to the media they didn't do it effectively. They did post things on WaMu's site, but it only showed up after you logged in and then went back to the main page. Very few people would do such a silly thing. There were more than a handful of employees who expressed their concern to sr. management that we weren't being aggressive enough in our PR efforts, but owell.
Posted by WaMu's PR Failure | September 26, 2008 9:58 AM@11: Like I said, you always post these on threads he is unlikely to read :)
Posted by Aislinn | September 26, 2008 9:58 AMWaMu was totally inactive on combating rumors and press until it was too late. As 11 points out, even when they did try and react to the media they didn't do it effectively. They did post things on WaMu's site, but it only showed up after you logged in and then went back to the main page. Very few people would do such a silly thing. There were more than a handful of employees who expressed their concern to sr. management that we weren't being aggressive enough in our PR efforts, but owell.
Posted by WaMu's PR failure | September 26, 2008 9:58 AMWhen I worked at WM earlier this year, I had to attend a meeting where the presenter blamed the borrowers (including himself, ?I guess, as he put only 5% down on a house in Issaquah) for the bank's woes. "They wouldn't have signed if they didn't wwant the money." The woman who cried out "what about moral hazard?" at the meeting became my new heroine.
Posted by i love my hourlong commute | September 26, 2008 9:59 AMHee hee! That Marketwatch article is great!
So looks like WAMU panicked its bondholders more than a year ago just by disclosing facts as required by law about its financial condition. Bondholders actually read the reports and concluded that WAMU's dissolution was baked in already. They began to hedge their losses right away, knowing they'd be wiped out, as they were yesterday.
More recently, WAMU panicked its retail depositors, and then individual depositors, by failing to be able to raise ordinary capital, failing to unload its bad assets, refusing to accept offers to buy, and acting as though nothing weird was going on.
WAMU's own actions created panic. The belated media reports were just candy sprinkles on the icing on the cake WAMU baked years ago.
Posted by tomasyalba | September 26, 2008 10:11 AMAs the many of you also too lazy to move your Wamoolah out of WaMu have probably noticed this morning, they finally changed their login page to say 'WaMu Customers: Welcome to JPMorgan Chase!'
I wonder if they'll be greeted as liberators.
@Aislinn It's the w7ngman fanboyism thought that counts.
Posted by w7ngman fan | September 26, 2008 10:22 AMIt's not that simple, Bellevue. If the market were that simple, it'd be far easier for the Feds to manipulate.
The media spent weeks harping on WaMu's perceived fragility, regardless of the bank's true status. That had a subversive, cumulative effect that sapped the bank's resources.
Posted by Gomez | September 26, 2008 10:43 AM@18: It's not that I was too lazy to pull my money out. It's that I saw the risk of losing anything as too low to warrant exacerbating the problem, in however insignificant a way, by freaking out and stuffing all my money in my mattress. The fact that it was much less work for me to not do anything was just a nice bonus.
Posted by Ben | September 26, 2008 10:50 AMGomez, The junk rating happened the same day that 16.7 bil pulled out.
Posted by Bellevue Ave | September 26, 2008 11:08 AMfurthermore im not denying the obvious that WaMu was in trouble or it was a simmering that turned into a boil, it's just that by your own post at the start, you can see the chain of events that led to the precise outcome a few days later.
Posted by Bellevue Ave | September 26, 2008 11:21 AMIt's my fault. I shouldn't have bought those groceries. It pushed WAMU over the edge.
Posted by elswinger | September 26, 2008 12:27 PMAll of it at once, Bellevue? You can verify this?
Posted by Gomez | September 26, 2008 12:42 PMPosted too quick...
... this contradicts news reports that the run took place over a 10 day period.
Posted by Gomez | September 26, 2008 12:43 PMComments Closed
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