RAY

If you're out there in cyberspace jump in here.

I need to ask you a serious question. My bank, WAMU (aka Washington Mutual) is seeing its stock plunge.

On DrudgeReport they have a headline: "California lines for cash" -- Investors are lining up at Indy banks in California to withdraw their money. How serious is this? Really? I will pull out my money if necessary. Even if the FDIC covers your loss you'll be looking at a long time before you see any of it.

I'd ask my other "money guy" (RightisRight) for advice because he will never say anything if he thinks it might make Bush look responsible for the disaster he has plunged our economy into.

After reading the link below, do you think there is nothing to worry about with WAMU or do you think they're just buying time right now and want to stall a run on the bank?

"I'd ask my other 'money guy'"...." = "I won't ask my other 'money guy'...."

wrong title for my link above -

It was about WAMU not Indy bank.

Ironic that Phil Gramm was the sponsor of the very legislation that allowed banks to engage in questionable practices and investments, overturning laws that had served the public well since the 30's.

And this guy is also the chief architect of McCain's economic policy.

Additionally, there was no oversight of mortgage practices during the 6 year NeoCon reign. Surprisingly, 'suggestions' that banks oversee appraisals to ensure the properties were actually worth what they were being mortgaged for went out the window during that time. Hundreds of thousands of loans were made at 120% of the realistic value of homes, further inflating prices (and in the eyes of mortgage companies, profits), yet no one in the GOP Congress held a single hearing or questioned shaky practices or bank's investments in junk bonds, derivatives, and the like.

Making a run on the bank to withdraw their money probably isn't going to help matters.

Where's George Bailey when ya need 'im?

RAY

Stumbled on this blog re comments about whether people should draw their money out of WAMU. These were comments from back in April 2008. Even scarier now. I'm going to call WAMU myself now but I know they'll say there's no problem.

Don't the banks have a legal duty to tell you if you ask if they are in trouble? Probably not any more since Bush has literally let the banks (and all other financial institutions) run amok the entire time he's been in office. There is no one following federal rules and regs anymore!
People who unknowingly have portions of their 401k pension plans deposited in these banks are in trouble too.

CC--tune into Savage--he blames everyone and might have some information you can use to act on.

AU--Congress voted for the rules and regulations so poor people could get a home.

Then the unintended consequences erupt and let's blame the Congress. The whole Congress and Bush.

It's like the gas prices. Congress and the POTUS for 20 years has been in charge of the country's energy policy.

No drilling, no nuclear plants--no nothing.

Then when the shit hits the fan--who does Congress blame? The oil companies and the speculators and the American People!!

They are all rotten do nothing SOB's.

Murphy-
Carter had begun and funded many programs toward alternative energy sources, but Reagan shut them all down. We now buy much of our solar/wind/clean energy patents and products from Europeans.

MURPHY

Unh uh.

Banking is one area where there should be the most stringent regulation possible not less.

And how convenient the GOP Congress passed Bankruptcy laws at the same time that left people really twisting in the wind if they got in trouble with loans the mortgage companies made on houses their own appraisers valued at 120% of actual value - essentially creating negative equity the second the loan was signed.

Meanwhile, the GOP Congress did ZERO oversight on the mortgage industry while some Dems in Congress were saying this situation was inevitable if not amended.

Spin all you want to, but Gramm's bill has done a lot of damage.

PS MURPHY

You didn't read that article did you?

CC--tune into Savage--he blames everyone and might have some information you can use to act on.

www.760kfmb.com

click to listen live..

Posted by MURPHY at 2008-07-14 06:14 PM

Just saw your link to Michael Savage right now and have turned him on. Still some more left to his show. Right now Savage is on a roll bashing Rush. I didn't know Savage didn't like him. Anyway, I'll save this link and listen again tomorrow too. Thanks!

Weiner. The man's name is Michael Weiner. He's one of the biggest phonies on the air.

Ray

Indy bank here in my town had police guarding the door at the bank while people were lined up for hours to get their money out. The manager at WAMU told me today Indy is being "seized" (his word) and is in real trouble.

Ray

I'm getting all the scoop on my local radio now as the Indy bank being shown on the news was evidently right here in my own hometown. More than $2 billion has now been yanked out by depositers since June and today they would only let 8 people in the bank's door at a time. People in line waiting didn't care what the bank had to say -- they just demanded their money and the bank located here is going to even sell the building. Indy is kaput.

Another Mission Accomplished.

AU--Congress voted for the rules and regulations so poor people could get a home.

No, they did it so banks could get into speculative deals, like signing bad mortgages and bundling them for sale to some other greedy idiots.

Thankfully, bush is there to bail them out, no matter how much it costs the taxpayer, because Rightys are all about fiscal leadership.

Ya, NORTHGUY3

Bush touted the home ownership percentage.

Problem was, it was based on the same hocus pocus as his borrowing America into the next century to give the illusion of prosperity.

Anyone can max out their credit cards and appear to be anything with the proceeds.

What Phil Gramm's bill did was (as you stated) was to allow the banks to get into trading derivatives and all kinds of risky investments, as well as allow mortgage companies to send appraisers who appraised homes at 120% of market value.

The GOP has wanted ZERO oversight on anything. Well, we know a little more about what they were up to. Of course, those like Gramm are living high on the hog lobbying for the banking industry.

Califchris, this should answer your question.

"Washington Mutual said it too continued to "significantly" exceed the well-capitalized threshold, having recently raised $7.2 billion from private equity investors."

Its always nice to have guys like Americanunity and Northgay3 fanning the flames of fear and slinging their feces all over the place.

Magic Negro

Plenty of blame to go around--

Reminds me of the S&L crisis that we had during the Reagan years.

Why do the Republicans do this to us?

Who were the Keating 5 again?

Kerrin you can deflect the blame all you want but the truth is the bank is going down because of their lending practices not because Schumer may have drawn attention to it. I swear righties love to kill the messengers.

BTW....this is all so reminiscent of the Savings & Loan Scandal isn't it. I've been predicting the S&L Scandal on Steroids and that is exactly what it seems we have got. Republicans in power think it is a license to steal. Unfortunately it was/is.

DANNI

Heck, we just agreed a few weeks ago to bail out Bear-Steans to the tune of a hundred billion or two.

In the end, this crisis will make the S & L bailout look like peanuts. What the hay, Bush loves spending money like a drunken sailor. The GOP HATED regulation or oversight, so they didn't engage in any for 6 years.

How ironic McCain's the presidential candidate. His mentor, Charles Keating, went to prison over the S & L crisis, and McCain just barely escaped a felony himself.

but, but, but, Shrub says the economy is "basically sound".

"The GOP HATED regulation or oversight, so they didn't engage in any for 6 years."

Make no mistake though, lots of these guys made lots of money. Or rather, stole lots of money and still are in their final feeding frenzy of this Republican presidency. Watch, a few will be charged with crimes and sent to prisons in a pretense that there is justice in America.

"but, but, but, Shrub says the economy is "basically sound"."

Hey...he knows that gas if $4.00 per gallon....now.
He's on top of things.

Why do the Republicans do this to us?

Who were the Keating 5 again?

Posted by Manypaths at 2008-07-15 03:51 PM

ummm when so the US economy collapses they can declare Marshal Law?

just a wild ass guess...

"Who were the Keating 5 again?"

Who were the Keating Five again?

MANYPATHS

I'm sure you know, but for those who don't:

"The Keating Five were five United States Senators accused of corruption in 1989, igniting a major political scandal as part of the larger Savings and Loan crisis of the late 1980s and early 1990s. The five senators, Alan Cranston (D-CA), Dennis DeConcini (D-AZ), John Glenn (D-OH), John McCain (R-AZ), Donald W. Riegle (D-MI), were accused of improperly aiding Charles H. Keating, Jr., chairman of the failed Lincoln Savings and Loan Association, which was the target of an investigation by the Federal Home Loan Bank Board (FHLBB)."

Watch, a few will be charged with crimes and sent to prisons in a pretense that there is justice in America.

Yeah right Danni. Just like in the S&L scandal huh?

Hell, one of those guys is running for President as we speak.

Prison? Riiiigggght.......

Are there still a few of the more dim-witted righties spewing on about how great the economy is going and that folks having financial problems should ease of plasma tvs, going out all the time, buying expensive cars and clothes they can't afford, etc. etc.?

Or are these fucking idiots standing in the bread line (or bank line in this case) wondering how their fantasy land was shattered?

Thankfully, bush is there to bail them out, no matter how much it costs the taxpayer, because Rightys are all about fiscal leadership.

Posted by northguy3

But, the Democrats control the House. There cannot be a bailout of the banks without the House.

"ummm when so the US economy collapses they can declare Marshal Law?"

No, they'll just start blaming President Obama.

They'll have the Obama Recession, Obama Inflation, Obama War, Etc. By the time we fix it America will be complacent enough to fall for the same scam again, each consecutive round though it gets larger. Eventually the right will succeed in destroying this country just like the USSR collalpsed.

Our great military will be like the USSR's....tied up to docks rusting, sitting on the ground without fuel, etc.

Then....the Cold War will really finally end.

"But, the Democrats control the House. There cannot be a bailout of the banks without the House."

But what choice do we really have???
Let the banks fail???
I see anarchy if that is allowed to happen.

Sometimes, the hardest choice may be the right one.
Let the banks fail. A bailout could hurt the people more than letting them fail. Most poor people are covered under FDIC.

Only the rich will hurt, but that's ok. They have lots of money. That's why we tax them more - or want to. They won't mind if the banks collapse. There's plenty of their money elsewhere.

The great thing about not having any money is that you can't lose whne the banks collapse.

You can't lose over 100 thousand dollars.

If you have more than 100 thousand dollars in one bank you are stoopid and you deserve what you get and really didn't earn or need that money anyway right?

NG3 you are totally wrong as usual. It's the GOP that has been trying to reign in fanny and freddy for years. Chuck Shumer has fought tooth and nail to protect their status.

As for racing to take out insured deposits on a rumor, is totally stupid. the only risk is that your time deposit may get broken and returned prior to maturity...IF rates are down and they can replace your deposit with less expensive monies.

As for wa mu, they have two banks, one ranks a 150 out of 300, the other is a 300 out of 300. That's a 3/31 number, and they probably have slipped heavily, but I would not worry, much less create a panic like shumer did that prick..."As noted here on Monday, Schumer sent letters to the Office of Thrift Supervision, the Federal Deposit Insurance Corp. and the Federal Home Loan Bank of San Francisco, saying he was "concerned that IndyMac's financial deterioration poses significant risks to both taxpayers and borrowers.""

He made them close the bank the douche by creating a panic amongst depositors

As for Indymac, that was a normal bank closing. FDIC moved in Friday night, closed them down, and audited the books. Re-opened Monday as the New Indymac bank. All insured deposits as is...all over 100,000 (250,000 in IRA's) are tested to gauge the extent of their insurability.Some deposits over 100,000 are trust pools where they may have insured with descernable 100,000 amounts aggregated to get a better rate. Those too will be honored.

The fdic is very generously paying 50 cents on the dollar for true uninsured deposits.

Within a few months the branches and deposits will be sold off to other banks. The loans will take years to capture. This is why many old employees are retained by the fdic..even though they were the ones who oversaw the debacle...they are the experts on unraveling on the complicated loans, and best at helping market/workout the complicated structures....

BTW Anyone who owed them money on a loan...still owes the money!

as well as allow mortgage companies to send appraisers who appraised homes at 120% of market value.
per AU--

That is not really correct there AU--

The appraiser can be sued and lose their license if they over appraise a house deliberately.

It is not in their interest to over appraise a house.

Now if the lender wants to justify the request of the borrower to loan more that the actual market value of the house--the lender will do it.

Appraisers are appraising the house/property based on the market value--they can't pull numbers like 120% over the value.

DAVE (or anybody else with knowledge)

Is that $100,000 per account or $100,000 per customer?

I've never really known.

120% appraisals:

The appraiser can be sued and lose their license if they over appraise a house deliberately.

It is not in their interest to over appraise a house.

MURPHY

I saw the head of the mortgage industry association on TV day before yesterday stating that exactly that scenario happened quite a lot - unnoticed due to lack of regulators going into the field to do their jobs, but discovered as homeowners who took them out started to default on their mortgages.

Subprime lenders sending out their own appraisers.

OMG-I find it amazing that it is always Bush's fault. He is the figure head of the the country. The senate and congress make the rules, laws, etc. Not the president. He can propose many things, can change some things, but the real problem is the Congress and the Senate! Must we forget what caused the depression? Banks, stock market, speculators out of control! Just like today. The rules put into play after the crash are not inforced today!! Watch out! Banks starting to fold. People want their money an not and its not there! Run on the banks. BAD NEWS!!

LS638 (and whoever else you are)

Congress cannot enact legislation. They can only write it and send it to the President for a signature. ONLY then does it become law.

Man, were you smoking pot in the parking lot while others attended elementary civics classes?

It's per person...but one can also have an IRA insured to 250,000 in addition to the 100K. If one is married, you can create 400,000 in accounts properly title one for H, one for W, one for H in trust for W, and W ITF the H.

ALSO you can create and In Trust For Accounts without ANY trust doc's...mom ITF son or grandson etc etc etc. IF you ask a banker who knows, there's alot of ways to keep it insured. But some people didn't know, and get caught squirreling the bucks away...and get screwed....

'ppreciate the answer, Dave

Thanks man

Califchris, this should answer your question.

"Washington Mutual said it too continued to "significantly" exceed the well-capitalized threshold, having recently raised $7.2 billion from private equity investors."

Magic Negro

MN doesn't know their language. Translation: They had to borrow from the Federal Reserve to stay afloat.

Chris

The case of the $4200 gives me the impression they are operating on a thin edge. I doubt the customer would have had a problem if he ordered something like a Cashier's Check.

For now I don't think your savings are in any danger as long as FDIC has the funds, assuming you have less than $100k in there. Keep a couple weeks of cash handy just in case there are delays in getting repaid.

People have very short attention spans. The IndyMac and Fannie Mae crises will die down soon and be forgotten about. Then in maybe a few months another crises will make front page news.

Take this as a warning to keep no more in a bank then what you need to pay bills. My payments go out on the same day my paycheck comes in.

You know my recommendations about silver, gold and treasuries.

RAY

Am I mistaken, or did I read somewhere sometime ago that you can now only keep so much gold?

Gold, schmold.

Got any plutonium?

It was discovered at Berkeley by hippies.

I got a chuckle out of klifferd's defense of "muslim" science. Been a while, ain't it?

Actually it was the last vestiges of a genuinely fantastic pre-Mohammad Arabic culture, which was quite rich. Islam killed it.

He made them close the bank the douche by creating a panic amongst depositors

Posted by DavetheWave

I ain't with you on this one Dave. IndyMac spun off from Countrywide because their toxic loans were too large to be accepted within the legal limits of Fannie Mae. IndyMac was exceptionally overextended.

The whole banking system is an accident waiting to happen. I don't see any near term risk, but it's better to be ahead of events, because they can't be predicted with any timing accuracy.

AU

I've been accumulating silver as I can afford for over five years. It has much better fundamentals than gold. Gold would be a second choice when silver is unavailable.

RAY

At present my silver consists of books of Mercury dimes, old quarters and two sets of silver I inherited. I just might buy some.

As to my question about gold, I remember reading somewhere about limits imposed on the amount of gold you can have. Any truth to that or was it something I saw in passing here?

Also, how do you purchase your silver? 1 oz ingots? Some other denomination? What would be the best weight for liquidity?

Thanks for your reply and in advance for this one.

I saw the head of the mortgage industry association on TV day before yesterday stating that exactly that scenario happened quite a lot - unnoticed due to lack of regulators going into the field to do their jobs, but discovered as homeowners who took them out started to default on their mortgages.

Posted by AMERICANUNITY at 2008-07-15 06:35 PM

AU--the mortgage guy is covering (meaning he is lying)for what the companies do when they write a loan.

The appraiser can't write an appraisal for more than the market value of the house. You have seen appraisals--yes--for your own house maybe?

They include 3-4 other properties in the area to show the market value.

Now when the loan goes to the company--they turn around and might offer the borrower another 50k as home equity line. That's how they get to the 120%...

Another problem is that when the house was first appraised they went with market value and houses were selling for way over what the house was actually worth.

Then when the borrower defaults it's months later and housing market value fell below what the person got on the loan.

So when people go to refinance they are upside down on the loan compared to the market. The borrower has to pony up 10k-20k-30k to refinance and get a better rate.

Most folks dont' have that kind of money--they default.

Oh Ray I completely agree that they were an accident waiting to happen. Their biz plan did them in..BUT their sudden collapse was caused by a run on deposits caused by a letter MADE PUBLIC warning all of their precarious psoition

MURPHY

I'm only the messenger about the 120% mortgages. The appraisers worked for the subprime lenders, who, if the head of that organization I mentioned is correct, artificially pumped up the prices in order to make a larger loan they immediately flipped.

He was on Washington Journal yesterday morning. Don't recall his name. There were several callers who'd fallen victim to these scams as well, mostly in Florida.

AU

As to my question about gold, I remember reading somewhere about limits imposed on the amount of gold you can have. Any truth to that or was it something I saw in passing here?

There is no truth to it.

I've dealt with these people for decades. They'll answer your questions and they won't screw you. Read the Ted Butler column to learn about silver.

MURPHY

As early as 2005 the FBI was investigating just such scams.

:...Fraud for Profit and Fraud for Housing. Fraud for Profit is sometimes referred to as "Industry Insider Fraud" and the motive is to revolve equity, falsely inflate the value of the property

Evidently the scam meant the mortgage brokers, who were working on a percentage of the loan before selling it (or whatever you call it), inflated the price to increase their commissions. Since 2005 the practice became more widespread as subprime loans really took off..

Dave

That may be about Schumer. Do you realize what a massive Pyramid Scheme fractional reserve banking is? This has gone way beyond any safe limits. I'll tell anybody who will listen. Get your money out of there!!! Don't keep more than you need for paying bills.

falsely inflate the value of the property

Popular practice especially in areas experiencing high appreciation. Couple that with independent appraisers who work exclusively for brokers and you get a snowball effect. One guy bumps the appraisal a few thousand so the equity reaches 20% for a conventional refi and the next guy uses that to justify another bump.

Normally this would be an anomaly, but when refi's were hot a neighborhood could be bumped up pretty quickly.

Brokers can tack on fees as they like - within certain bounds. Mortgages are based on a point spread. Most people don't want to pay points so the broker simply chooses a rate that pays the broker points.

Rate sheets quote like this: 6% = + 1pt; 6 1/4 = 0pts; 6 1/2 = -1pt.

At 6% you pay 1pt. At 6 1/2% the broker keeps 1pt.

You can't bump the title fees, but everything else is fair game like Loan Origination, etc.

AU--I don't doubt there was fraud mixed in with this fiasco of subprime lending.

And every stage of the bundling someone made money.

The biggest losers would be the Fannie and Freddie banks.

They are another example of gov't gone haywire.

Why two gov't lending institutions? PC run amok to have male/female. Complete screw up for a bureauracy. No surprise I guess.

And there are going to be more banks. Didn't Countrywide get the deal before anything went public about problems?

The biggest losers would be the Fannie and Freddie banks.

Don't think so. The biggest losers will be everyday Americans. All signs point towards the Fed monetizing their loses. That adds to inflation and the fall of the dollar.

I agree Ray--we lose big time.

Do you realize what a massive Pyramid Scheme fractional reserve banking is? This has gone way beyond any safe limits. I'll tell anybody who will listen..

What is this--short version..;o)

Didn't Countrywide get the deal before anything went public about problems?

Posted by MURPHY at 2008-07-15 09:59 PM

Ya. I think they were sold to Bank of America in a stock swap deal of some kind.

Here is a link

Murph

You don't know what a Pyramid Scheme is?

A pyramid scheme is a non-sustainable business model that involves the exchange of money primarily for enrolling other people into the scheme, usually without any product or service being delivered. It has been known to come under many guises.

Pyramid schemes are illegal in many countries, including the United States,[1] the United Kingdom, France, Canada, Malaysia, Norway, Australia,[2] New Zealand,[3] Japan,[4] Nepal,[citation needed] Sri Lanka,[5] and Iran.[citation needed] These types of schemes have existed for at least a century.

MURPHY

One fact that's getting more attention, especially from pension funds, is that the major banks keep hundreds of billions 'off the books' and never disclose what they are, only alluding to what those 'assets' are.

The bank deregulation Phil Gramm set in motion allowed banks to invest in all kinds of risky investments that leave them (and their shareholders) heavily exposed should commodities, derivatives, and all kinds of questionable new equities (that are too esoteric for even some experienced money people to understand) come crashing down.

Transparency is a word that no longer applies to financial institutions, setting aside every pragmatic regulation that served shareholders and the public well since the 1930's.

Deregulation is really never a good thing when it comes to matters that could not only lose hundreds of billions, but also set the country on a downward path should dominos start to fall as they are now, shaking the confidence of the American people and world equity markets.

If other countries won't lend us money because we're acting like debtor nations we used to chastise for similar practices we're in a world of hurt.

I'd ask my other "money guy" (RightisRight) for advice because he will never say anything if he thinks it might make Bush look responsible for the disaster he has plunged our economy into.

Posted by CalifChris
* * * *

LOL. Really? I haven't beaten up Bush over wild spending and runaway deficits, and for not using Executive Privilege sooner to allow offshore drilling?

Guess I was just dreaming when I thought I wrote all that stuff for the past few years.

Fair enough. Here's what Ray would say: pull you money out of the banks, and buy silver. That's what he's been saying for months and months. So take his advice, and quit pussyfooting around. If he's your "money guy"--listen to him, and do what he says. Just like you would your doctor or your attorney.

Go ahead. Let me know how it all turns out for you.