Thursday, September 25, 2008

Banking Giant, Washington Mutual goes Bust

JP Morgan has taken over the depositors accounts of WAMU, after the bank was seized by the FDIC, today. The Government is saying this won't cost any money. This is a blatant lie. If WAMU had not incurred huge losses, they would still be operating. You can also be assured, that over the last year, as it has been failing, the bankers have been stealing as much as possible, knowing the golden goose was dying.

The FDIC is guaranteeing just under 200 billion in deposits. Nobody knows how much the FDIC will have to reimburse in losses. The minimum will be the amount that WAMU has projected in losses. That would be about 30 billion. Using my rule of thumb, it will be at least 2-3 times that much. This will more than wipe out the FDIC's remaining reserve funds.

The FDIC will soon be asking for at least another 125-175 billion of taxpayer money to recapitalize their reserve. What a bunch of hapless goons.

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