Federal government sells failed thrift to JPMorgan

By Matthew B. Zeidman

SEATTLE (Hollywood Today) 9/26/08 – In the latest shocker involving the worsening financial crisis panicked politicians have yet to identify as an economic depression, the largest savings and loan in the United States, Washington Mutual (WaMu), has collapsed.

The bank, known for its commercials where a friendly employee attempts in vain to teach snooty bankers the proper way to service customers, was taken over by the Federal Deposit Insurance Corporation Thursday night and sold to rival JPMorgan Chase for $1.9 billion.

“With insufficient liquidity to meet its obligations, WaMu was in an unsafe and unsound condition to transact business,” the Office of Thrift Supervision said in a statement, pointing to $16.7 billion withdrawn by depositors since Sept. 15 as the catalyst that led to the government takeover.

According to JPMorgan Chase, it will rebrand all WaMu branches as Chase banks by 2010.  In the meantime, existing WaMu customers will have unrestricted access to their accounts.

WaMu Failure a Chilling Sign of Things to Come

WaMu is the latest in a string of banks, mortgage lenders and investment firms that have failed, fallen under government control or been forced to sell following the mass default of subprime mortgage loan holders that began in 2007.  Other such institutions have included AIG, Countrywide Financial Corporation, Fannie Mae, Freddie Mac, IndyMac Bank and Lehman Brothers.  Congress is currently working to draft a $700-billion economic-relief package, but has yet to finalize any legislation.

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