Fear 101

While I am sure there was a good reason for the Feds to seize Washington Mutual, there were a conspiracy theorist's concoction of unusual bits about it that raise doubt as to whether or not it was warranted. Perhaps the most glaring is that seizing banks traditionally is a Friday afternoon affair, rather than something mid-week. The other sort of odd thing is that Washington Mutual's management didn't sound terribly involved. Personally, I think it was a way of getting Congress to act, in Treasury's favor, by pulling this off just before the vote on bailing out Wall Street. Of course, the downside of all this is that now I have to move my money, as JP Morgan Chase (First Chicago, Bank One, etc) is not an institution I care to do business with, because from my experience Bank One/First Chicago were more interested in billing people to bank with them, then providing decent services to their customers. The less money you had in their bank, the more you paid the bank to handle it. Considering Washington Mutual's collapse was due to mortgages to people at the lower end of the monetary spectrum, I don't have high hopes they will be able to keep their homes. In addition, I would be the Feds also planned to buy all the bad stuff from JP Morgan as soon as they could, allowing the new owners of Washington Mutual a really cheap expansion opportunity. Remember, the legislation Treasury & the White House are clamoring for includes no oversight and no questions about the propriety of the purchases my with the tax-payer money.

All that being said, I doubt Washington Mutual needed to be seized yesterday, but that it happened to scare law maker's into action and tax-payers into asking fewer questions. If the Bush administration hadn't done this sort of thing before, remember Colin Powell's UN testimony, perhaps I wouldn't be so cynical, but I think they are just trying it again. And again, it is to the disadvantage of the american people. If Congress and the tax-payers fall for it again, then to paraphrase our future VP, Americans are exceptional (exceptionally stupid). I really hope that exceptionally scary lady does not become VP.