What really killed WaMu?

[Broken Arrow]

Washington Mutual may not have been in a good position to begin with, but ultimately, it was the run on the bank that lead to its prompt demise.

...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...

What's really worth mentioning isn't just WaMu's collapse, but how we managed to dodge a bullet in its aftermath. You see, WaMu has one of the biggest deposit base of any banks, and much of which would require FDIC coverage. There has already been concerns as to whether the FDIC can absorb such a blow, but fortunately for us all, J.P. Morgan agreed to buy WaMu (well, parts of it anyway), allowing the FDIC to dodge that bullet all together.

Even if it's speculative at this time, the ramifications of the FDIC faltering at all would be staggering. That's most definitely something that we can not even afford to entertain.

And not that I'm pointing fingers at anyone, but WaMu's collapse might even be avoided if people didn't get scared about having their money there.

It's just something to think about. Sometimes, we have to have a little faith.

[simpleyme]

I work for a small business and for years we have refused to take checks written on an account from WAMU

they would give a checking account to a monkey , almost every bad check we ever got came from that bank as soon as we stopped accepting their checks a couple years ago we have received NO bad checks I do not know the whole operation but I assume they were into fee harvesting big time, so they made a lot of money off bad checks

I have thought of them as bottom feeders for years

[StressLess]

Hi, BA, from your article: "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."

I don't think you can blame people for finally moving money out that they probably should have moved years ago to stay within FDIC limits.

I know you are watching Wachovia, too--FYI, there is a money guy on the radio here who is telling people to get this kind of excess money out of Wachovia, also--this weekend if possible.

[DayByDay]

I removed my money from WaMu, though it was FDIC insured. I did not want to deal with the possibility of having no access to my money for whatever period of time. WaMu only has itself to blame for its failure by causing the conditions that created a run on the bank.