Another One Bites The Dust
Sep 26th, 2008 @ 3:48 PM by Alden Smith
First Bear Stearns, then Fannie and Freddie. Now Lehman Brothers and IndyMac. Today Washington Mutual. Dash away, dash away, dash away all. It seems the vultures have come home to roost on Wall Street. Instead of making hay while the sun shines, the Wall Street gang is dancing to pay the piper.
According to the Nightly News tonight, Washington Mutual hit the skids today, making it the largest bank failure in American history. U.S. regulators seized the bank on Thursday. The reason given was poor choices in the mortgage market. JP Morgan, Chase and Company quickly grabbed them up, hopefully aborting a run on the bank. Doors were open as usual this morning.
Bank stock took a nosedive, with Wachovia Corp, the 6th largest bank in the country dropping 20%, and National City Corp, a large Midwest bank, dropping 22%. There is anxiety on the Street.
Meanwhile, In Washington, the fight goes on amongst the Dems and Repubs on just how to deal with this scenario. President Bush’s proposal of a $700 billion bailout is not sitting well with both parties, and surely is not sitting well with taxpayers. A poll I participated in today shows that 81% of the American public is against the bailout. Very few people are undecided, making this a very unpopular proposal. Making it worse is the fact that this is an election year. Many Dems and Repubs are treading on thin ice with their constituency over this proposal. Feeling is this – taxpayers do not want to be saddled with this huge bailout because of mistakes and greed in the marketplace. That is what it really boils down to, and I have to agree with those that feel this way. Although we get assurances that we would make the money back from sales of the mortgages, there is no real guarantee that this would happen. We would be left holding a very large bag, I fear.
The proposal is certainly not doomed to failure. I think that it will be hammered on until it is so watered down that people will say “Okay, let it go”. I personally hate to see that happen without dire consequences for those that got us in this mess. That certainly hasn’t been a strong selling point of the bailout, and if it were, I think that it would be more agreeable to many people. Basically, the way it is now, the people who got us into this mess are going to be awarded for their greed. And to anyone’s way of thinking, that is just plain wrong…