Last night the United States government took over Washington Mutual and sold it, piecemeal, to JP Morgan Chase, in the largest savings and loan bailout in US history. Much of the Washington Mutual’s troubles, like that of many other banks, were caused by defaults on high risk mortgages as well as a dramatic drop in the value of WAMU stocks over the past months.
Simultaneously, the Democrats and Republicans were busy reaching no agreement at the White House in their endeavours to bail out the rest of the nations financial institutions. Rumor has it that the gathering was actually reduced to a shouting match when the Republicans revolted against their own President by proposing a new plan that was contrary to his and, as a result, absolutely nothing was solved. At best, the solution will be our tax dollars going to purchase bad assets from the banks in order to prevent them from going belly up. If only Warren Buffet would bailout all of the banks and not just Goldman Sachs.
As our most prestigious financial institutions crumble around us, and consumer confidence is at an all time low, and retailers predict the slowest shopping season ever, the rest of us just bite our nails and pray that we are able to dodge the next Great Depression.