It was announced just a short while ago that the FDIC has seized Washington Mutual's deposits and that JP Morgan is buying it.
This is the 13th bank to fail this year, a sure sign that the US is in pretty deep financial trouble.
Everyone saw that Washington Mutual was in trouble, but I think we all hoped that it would ride it out. I, for one, didn't think it would actually fold.
So if you are a Washington Mutual customer, don't worry, your money is FDIC insured if you have less than $100,000. You'll be notified probably by mail about what happens next and everything should keep working in the meantime.
The biggest sign that WaMu was in trouble for me was the rapid hike in Savings Account Interest Rates. This occurred because WaMu was trying to attract as much business as it could to get enough money to keep going. So keep an eye out for similar behavior from other banks. I doubt this will be the last failure we see this year, but I really hope nothing bigger goes under.
So what is your take on this? Could this have been avoided? Will it happen again? Should we be scared?
I know that I'm going to be keeping a very close eye on the economy and on announcements from other banks right now. I hope all of you WaMu customers have a smooth and easy transition over to JP Morgan.