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[Solved] Is Washington Mutual Going To Die?

LewishamLewisham Registered User regular
edited July 2008 in Help / Advice Forum
Quick question: My girlfriend has all her money in Washington Mutual. I've banked with them once before and found them to be a decent bank; certainly nothing happened to make me feel that I shouldn't do so again. However, that was for only 9 months on a study abroad year. She's encouraging me to do the same when I return to America, but I'm increasingly concerned about WaMu suffering a run.

I keep hearing stories about American banks looking like they might be in trouble, and high on the list is WaMu.

While I understand the whole federal insurance malarky, if WaMu goes tits up is there really enough funds there for the customers? Should I be worried about WaMu going tits up at all, or is it just scare stories?

If WaMu are looking like an increasingly dodgy proposition, which banks are in a more stable state?

Lewisham on

Posts

  • CauldCauld Registered User regular
    edited July 2008
    Unless you have more than $100,000 in a bank, its FDIC insured. So I wouldn't worry about it. If you do have more than $100,000 I recommend you open another account at another bank, so you'll have it all insured.

    Cauld on
  • Monolithic_DomeMonolithic_Dome Registered User regular
    edited July 2008
    You are insured by the FDIC for up to $100,000. And if you've got more scratch then that there's a few better places to stick it then a bank.

    Also, if WaMu goes "tits up" as you put it it's not going to be a "run on the bank" like in a Wonderful Life or something. Their debts and assets will be purchased by a bigger bank at a very low rate so everything stays solvent. See what happened to Bear Stearns.

    Monolithic_Dome on
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  • LewishamLewisham Registered User regular
    edited July 2008
    Cauld wrote: »
    Unless you have more than $100,000 in a bank, its FDIC insured. So I wouldn't worry about it. If you do have more than $100,000 I recommend you open another account at another bank, so you'll have it all insured.

    Does the FDIC have enough money to save a bank as large as WaMu?

    I sure as hell won't have $100 000 :)

    Lewisham on
  • CauldCauld Registered User regular
    edited July 2008
    Lewisham wrote: »
    Cauld wrote: »
    Unless you have more than $100,000 in a bank, its FDIC insured. So I wouldn't worry about it. If you do have more than $100,000 I recommend you open another account at another bank, so you'll have it all insured.

    Does the FDIC have enough money to save a bank as large as WaMu?

    I sure as hell won't have $100 000 :)

    yes

    Indymac recently went under, but anyone who had less than $100k got their money back. Those who had more were pretty upset though. There might be a few days of inconvenience, I think it took the feds a weekend to take over Indymac and run it themselves.

    The bank I work at is quite stable, USBank. But like most banks in America they don't have a strong (any) presence in all states.

    Cauld on
  • LewishamLewisham Registered User regular
    edited July 2008
    Cool, thanks guys. I'll take my chances with WaMu.

    Lock please!

    Lewisham on
  • PirateJonPirateJon Registered User regular
    edited July 2008
    It's not that simple.

    http://www.dailykos.com/storyonly/2008/7/20/64928/7807/206/554077
    Great! All accounts are insured to $100,000! We’re saved!

    Way wrong. The FDIC is an insurance operation. They make an educated guess as to how many banks will fail and what the total exposure is, then they collect insurance premiums from them. They’ve got $51 billion ... and Indymac alone sucked up 10% of that. If a big one lets go, like Washington Mutual or Wachovia, then the FDIC will look just like FEMA did facing down hurricane Katrina. Don’t go and look at the scoreboard on the Bank Implode-O-Meter unless you’ve got a very strong stomach. Oh, and do note that a good bit of those write downs are investment banks - the FDIC does not cover their activities.

    PirateJon on
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  • ThanatosThanatos Registered User regular
    edited July 2008
    PirateJon wrote: »
    It's not that simple.

    http://www.dailykos.com/storyonly/2008/7/20/64928/7807/206/554077
    Great! All accounts are insured to $100,000! We’re saved!

    Way wrong. The FDIC is an insurance operation. They make an educated guess as to how many banks will fail and what the total exposure is, then they collect insurance premiums from them. They’ve got $51 billion ... and Indymac alone sucked up 10% of that. If a big one lets go, like Washington Mutual or Wachovia, then the FDIC will look just like FEMA did facing down hurricane Katrina. Don’t go and look at the scoreboard on the Bank Implode-O-Meter unless you’ve got a very strong stomach. Oh, and do note that a good bit of those write downs are investment banks - the FDIC does not cover their activities.
    The fed will move mountains in order to keep the FDIC solvent.

    There is no way in hell the government will allow any FDIC-insured bank implode, because once that happens, it ushers in a new Great Depression.

    Thanatos on
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