Don't Panic yet

It took a bit of research but most stories seem to forget this important point:

Washington Mutual collapses in biggest bank failure in U.S. history - Haaretz - Israel News:

"The Federal Deposit Insurance Corp. seized WaMu on Thursday, and then sold the thrift's banking assets to JPMorgan Chase & Co. for $1.9 billion."

That means that before WMB was purchased it was not FDIC insured ... it was a savings&loan/trust bank ... it was NOT a federal bank.

"One positive is that the sale of WaMu's assets to JPMorgan Chase prevents the thrift's collapse from depleting the FDIC's insurance fund."

This would only happen because the bank allowed itself to get TOO big ... if it were a standard FDIC entity it would Not have depleted the fund, but it would have eaten a good bit of it ... but then isn't that what insurance is for?

"Washington Mutual's roughly $227 billion book of real estate loans put the thrift at the top of the critical list of U.S. lenders, analysts said. More than half of this portfolio was in home equity loans and in adjustable-rate mortgages and subprime mortgages that are now considered risky."

Now considered risky? They were considered risky before, that's why the ARMs & such were sold in bundles that FM/FM were 'forced' by the industry to buy. Actually if FM/FM hadn't been 'forced' to buy these loans, and if companies like CountryWide hadn't taken advantage of this then we wouldn't be in this mess ... no really.

Hubby and I have been married 20 yrs ... been in this house since before the GW Bush first term ... I can remember being approached by some of these loan offers (ARMs) over the phone before we moved - we even took out one of those 125% home equity loans on the old place after living there for less than 5 yrs so that we could work it so I was a stay at home mom. We were lucky ... we were able to pull it off and sell the house for more than both mortagages were worth because we both had a fairly good idea of basic finances.

now the only reason i bring this up is because everyone seems to be blaming Bush for the mortgage problems -- but people tend to forget that this has been going on for decades which puts in before the Bush administration ... he just happened to have been the poor bum who was in office when it hit the fan.

Just like Enron ... which started going down at the end of the Clinton admin. but didn't come to a full head until Bush was in office. And most people forget that when Bush took over the country was already headed into a recession (rumor had it at the time that Clinton admins had done it on purpose so that if Gore got in he could pull the country out with the pre-made antidote and gain a second term) ... too bad he was such a big baby about losing he wouldn't share it.