So, today the Federal Government shut down our bank. It wasn't entirely unexpected -- we'd been talking for several days about what happens when a bank fails, something outside our experience, and made a few emergency preparations, just in case. All the accounts are protected by the FDIC (thanks again, FDR: there's a reason you're still our greatest president), but we'll find out the practicalities involved over the next few days. How does a bank failure affect direct deposit? Is money from checking or savings accounts temporarily frozen? Have they shut down their Tyme machines, as seems likely?
Turns out this is the biggest bank failure ever ($310 billion dollars). I put it down to deliberate mismanagement -- they've done everything they could to wrack up as many bad mortgages as possible in order to collect as many processing fees as possible -- but their recent decline in customer service (every in-person visit now involves a sales pitch to give them more money) and name change from Washington Mutual to 'WaMu' (which sounds like a sick killer whale in faux-Inuit) couldn't have helped. Now WaMu is KaPu, it seems. Too bad.
In connection with the shutdown, they're being bought out by J. P. Morgan (the legacy of one of the most repulsive robber barons of the Gilded Age). Some of their branches will be shut down; I assume the name will change. For now the new owners promise to carry on with business as usual (but presumably less incompetently). Here's the link:
And on a day like this what did the best local paper have as its lead story? A piece about police tasering an emu. I kid you not:
More details about the downfall of Washington Mutual:
and here's another about what the new combined bank might look like:
Both of them leave out the big one I've become more and more convinced of: a bank shd not be traded on the stock market. Doing so creates obsession with short-term profit at the expense of long-term stability. Long-term is what a bank is all about; trying to run one like a start-up high-profit stock company is a recipe for disaster.
inside Edmund Wilson
1 day ago