Bye Bye Wachovia, and the Bailout is Rejected

Image by rednuht

Today has been a pretty crazy day in the financial world. Citi bought Wachovia today, therefore rescuing it from a messy failure. Wachovia was the next big bank on the watch list, so that will probably make things a little easier for them. 

The stock markets have tanked today after it was announced that the house rejected the $700 Billion Bailout plan. I have to say, I'm a bit relieved that it was rejected, mostly because yes... it is A solution, but I don't think it is the RIGHT solution. 

So basically, the financial sky is falling. Hang on to your hats because it is going to be a bumpy ride. 

Here is what I'm doing. Nothing. I'm sticking to reducing my debt and building my savings. I'm keeping my money where it is. I don't have any money in the stock market because it's not my kind of thing. I feel like it's too volatile. I have my trusty ING Direct accounts, and the rest of my money is in Bank of America, which appears to be one of the more stable banks right now. 

What should you do? Well, if you have a WaMu or a Wachovia account, don't worry. You should have a pretty seamless transition to either Citi or Chase. If you have money in the stock market you need to talk to a financial advisor right now to figure out if you are invested in the right stocks. Consider making adjustments to your portfolio. 

My biggest piece of advice, though, is to tighten your belt a little if you can and to try and save a little more and spend a little less while we all ride this out. 

They will be putting the bailout back on the table soon, I believe. Hopefully they will have come up with a solution that helps people more than institutions, but we'll see. 

On a side note, it's my wonderful husband's birthday today. 

Happy birthday, Andrew. You are my heart. 

WaMu Seized by the FDIC - JP Morgan Steps In

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.