By Ray on September 29, 2008
We figured Wachovia had until Wednesday at the latest for the bailout package to make a difference for them, Tuesday was a more likely scenario though. Based on what we saw, we figured National City would fall first followed by Wachovia. I guess at the end of the day it does not really matter.
Was this a bank failure? That depends on what you are looking at and who you believe. The FDIC arranged the sale to Citi which means that they were on the verge of failing. As you know, we made the call of who we thought could fail and most of the predictions were correct. We believe that National City is the next to go, unfortunately.
What is very sad is the fact that if the bailout package went through last week then this would not have happened. While we oppose this package it was goign to pass, that was a given. However, this package could have been completed on Thursday of last week, but Congress, in their infinite wisdom, decided to attach pork to the bill and then dragged their feet for 3 extra days.
Then, Yesterday, Pelosi, Reid, Frank and Dodd told us they have a bill and then proceeded to tell us how great they were for compromising on everything. What they didn’t tell you was that their incompetence cost us another huge bank with more waiting in the wings. To think that they saved us is just dumb, they are now part of the problem.
This was never a Republican or Democrat issue, this was an American issue and they failed us, miserably. We are nonpartisan, but believe that the dems, in this case, dropped the ball and should bear responsibility. While the republican administration and Congress screwed up, the dems had control for 2 years. The point is they need to politics on the sideline right now to fix this problem.
We have yet to get a copy of the plan as the website is still clogged, but we will voice our opinion on it when it is reviewed. Hold on as the next few days in the market are going to be a wild ride.
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By Ray on September 26, 2008
It was bound to happen, soon rather than later, that Washington would start the blame game. Senator Reid was just on and said that this is a Republican problem. That is simply not true, totally.
We are not partisan, at all, but we do give the Republicans more blame than the Democrat’s for one simple reason, they had control for 6 years. However, for the last 2 years, the Democrat’s have been in control of Congress. To lay blame is just plain dumb right now. Both parties took money from the financial services industry, so to say one party is guiltier than the other is dumb. They are all crooks.
On another note, WaMu is now bought by J.P. Morgan for $1.9B in one of the most necessary buyouts of our lifetime. What is amazing is that WaMu had $330B in total deposits and they were bought for $1.9B… do you think there was a problem there?
While this buyout averted one major bank failure there are more to come. We have had 12 banks fail this year, but there are a few big ones to watch, specifically Wachovia. This bailout and now the politicizing of this event is just ridiculous and it will make this not work. We hate the bailout, as you already now, but at this stage it is going to be passed so these people, our elected officials, need to make sure we get the most equitable deal possible.
The thing is a farce, but if they are going to do it then they need to do it right.
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