Wednesday, September 10, 2008

Whoo hoo, Wamu is KaPut, imo

(note: i tried to post this last night and blogger was f-ing up. so now you have one less day to act!)

I've been telling friends and family privately for some time that our friends at Washington Mutual are probably finished.

While it's true some combination of government intervention, relaxation of acctg rules, looking the other way, and capital infusions (or buyouts) could (and has) kept this turd swirling in the bowl after repeated flushes, I think the party is about over for these guys.

The irony is I've been a Wamu customer for years....and for the last several, much to my chagrin

It started out in the mid - late 90's. Seattle at the time, was basically run by an outfit called "SeaFirst". Well, SeaFirst sucked. Their customer service was hideous. And along came Wamu a former thrift (I believe) with an aggressive and humorous ad campaign to attract retail banking clients.

As their footprint expanded, one noticed that, "hey, these guys are a lot better at customer service than SeaFirst" A lot of people switched. SeaFirst as bought out by Bank of America (I believe) and throughout the west coast Wamu was going toe to toe with Wells Fargo.

Wamu expanded retail operations everywhere and was aggressively growing their homelending operations to match Wells' position in the marketplace.

Those were the salad years.

Around 2001, I slowly started to notice the changes in Wamu. They were no longer a pleasure to do business with. Aggressive expansion to deal with huge numbers of poor retail clients and an aggressive push that focused on "no-fees" for many of the services other banks were charging for meant they had to get aggressive at automating systems (I guess).

And that's about they point where banks stop being useful to me. When the process becomes more important than ME.

While the examples are numerous -- almost too numerous to count, I'll recount the LATEST in a litany of b.s. I've dealt with with these clowns.

I live off my ATM card here. I pay a fee of 1% to withdraw money, but BROU makes WAMU look first class. I pay some bills from my US bank, it's tied into my brokerage acct for transfers, and I setup a joint account with my father, so i could get money to him easily/quickly -- quick online transfer. Also, in a pinch I could have him send a wire if needbe from the joint account because you cannot fax in a wire order and they have zero intl' presence (both big problems)

My ATM card was expiring and I couldn't reach my former roomate. I had left my address as my old CA address since they have zero Intl presence.

I finally gave up and went in to change the address to my parents' address so they could get the new card and forward it to me. I did this all online - nice. I called to order a new card and/or order my old card lost in the mail.

Well, because i had changed the address I had to talk to a supervisor..."we can fwd you a new card in mvd, but when we do your existing card will stop working"

"uh, can I wait then, because i am leaving for peru in two days and i need my card while I'm there"

"certainly, just call when you return to pick this up where we left off"

...well, already having had problems with wamu from south am i was nervous. but i went to peru, came back, called and as expected there was a problem. they couldn't replace the card for 30 days after the change of address...even though the previous supervisor had apparently found a way, the new one insisted that the "system" merely locked her out and it was impossible.
So, I pulled all the money out I could before my card expired, and asked when i could reorder....I would have to wait two weeks until the 10th of September to reorder. I explained she would be hangin me out to dry in a foreign country with no acccess to my money -- wasn't there something she could do? they give a sh*t. they are about systems not service.

So I called again today and reordered and it all went very smoothly...they system handled it i guess.

The "rub"? I'm pretty curious at this point (seriously) if they last until i get my card and can use it to withdraw the cash that's in there.

I think it's on the brink of going to the Feds.
While it's *possible* that they could be purchased, or ??? why not just wait until it's in receivership at this point. It gets really scary too in that I think a WAMU failure forced the FDIC to go back to the taxpayers to support them -- the premiums they've been collecting all these years are NOT going to be enough if WAMU crashes and burns. I think that would just about "tap" their reserves at that point. they make it past this Friday?

Rumours are pointing to the 19th -- a week after this Friday. But, in the end, who really knows with any certainty. God knows, more undercapitalized banks have been allowed to operate longer (indymac). I just think the latest fannie/freddie craptastic "stick save" has made it almost impossible for these schmucks to raise more capital in another preferred offering.

The only *other* out is some kind of forced marriage where the taxpayer guarantees any exposure in the wamu portfolio...otherwise some enterprising ceo looking to add retail outlets could quite possibly be putting an anvil through the floor of their vessel if they try to absorb wamu in a takeout / takeunder / takeover.

The only way I see it surviving is in receivership (on taxpayer dime) or in a buyout that is backstopped by more taxpayer money.
Could I be wrong? Sure. But, it's looking more likely by the day that I'm going to get an up close lesson in what it's like to have your funds at a failed bank.

They are a huge employer and employ one of my friends, so hopefully he ends up on his feet if this all goes down.

If you're a depositor and you have more than 100k, get it out TOMORROW. If you have any money you need in the next couple of weeks and don't need the headache -- seriously think about withdrawing it tomorrow.


We'll see if I end up eating those words.

1 comment:

Anonymous said...

I took out the bulk of my savings yesterday...