Uninsured depositors at WaMu headed for trouble

[Crunch Hardtack]

Link: http://www.marketoracle.co.uk/Article5618.html

Excerpt:

"Washington Mutual Inc. tumbled for a second day in New York trading after Gimme Credit LLC said unsecured creditors were "pulling funds'' from the biggest U.S. savings and loan. Washington Mutual disputed the report.

Gimme Credit analyst Kathleen Shanley cited a decline in federal funds purchased and commercial paper to $75 million from $2 billion at year-end, which Washington Mutual reported this week in its second-quarter results. Securities sold under agreements to repurchase dropped to $214 million from $4.1 billion at the end of 2007, she wrote."


and

"AJ Writes: "Someone thinks WM is going under. 35,000 Aug. put contracts traded at the 3 strike today, and 12,000 Sept. PUT contracts at the same strike. Both dwarfed open interest, so they're mostly new positions. This reminds me of activity in Bear Stearns in March."

 

[Terrel L. Shields]

If you have more than $100,000 there, pull it.

 

[Lloyd Bonafide]

If you have more than $100,000 there, pull it.

If you have more than $100,000 in there, pull your excess money out, pull your head out, and stop pulling on it.

 

[Workbox]

Was looking for a new place of residence, all the bridge underpasses have reservations or already tenant occupied.

My niece told me that at her Wachovia Bank, that the grey haired folks came in and took out and closed many of their accounts.

 

[Terrel L. Shields]

the grey haired folks

They remember what happened to their parents in the depression. And clearly the government is under-prepared. BTW, the original FDIC insurance limit hasn't kept up with inflation. Lots of people have over $100,000 in accounts, especially their IRAs which are supposedly protected to $250k

Considering the FDIC's position of having far too little cash to cover all the defaulting banks, it is obvious that the FDIC will try to act BEFORE a bank gets in so deep as to not have assets that will cover the accounts. The two banks West that were closed did so without even the over $100,000 folks losing money. The point was to try and avoid the FDIC kicking in cash on bailouts.