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thatcrazycajunThe bank where both I and my Songbird have checking accounts and I also have savings and Roth IRA, Wachovia Bank NA, has become the latest casualty of the defaulted-subprime-mortgage crisis. This morning, at the behest of federal regulators, it sold all its retail banking operations to Citigroup to avoid following Washington Mutual as the second ginormous bank to fail in a week. Near as I can tell, the only businesses certain to be still running under the Wachovia name are the investment banking business and its Evergreen money-fund subsidiary. Their web site's press release does not make clear whether our checks and cards will be reissued with a new bank name or not, but assures us that our funds are completely safe and that we should go on banking as usual. The New York Times has the best reportage I've seen so far on the story here.
This is ironic for me in that, back in the 1990s, I actually was a Citibank customer, having their American Airlines-co-branded AAdvantage Mastercard credit card. It's years closed out now, but now it seems the bank that held it is claiming me again. Wachovia's problems aren't even really of its own making; among all the banks and other financial concerns they bought up in their 1990s-2000s acquisition spree was something called Golden West Financial, which was up to its armpits in mortgage-backed derivatives that are now worthless. This caused Wachovia to suddenly find itself saddled with tens of billions of dollars in uncollectable debt, most of which Citi will now assume, leaving the remainder to be covered by FDIC.
And now comes word that, for the second time this week, the proposed federal bailout plan has been torpedoed, thanks to a slew of Democratic congresscritters and twice as many Republican ones who voted against it. (Poor Junior Bush and the House minority leaders just can't seem to whip their caucus into line on this; John Boehner of Ohio led his fellow GOP House members in kiboshing the deal last week, too.) Most of the liberal/Democrat groups and bloggers I keep track of seem overjoyed that the bailout has failed again; myself, I'm not so certain that it isn't a necessary evil. Talk all you want about the moral wrongness of Main Street being forced to pony up to save Wall Street from the consequences of its own stupidity and greed, but this thing has already caused all the big investment firms and several large banks to either go tits-up and close altogether or accept being bought out by one of the only three financial giants still standing. After this week, JPMorgan Chase (where I had my checking account when I lived in NYC), Bank of America and Citi will between them control 30 percent of the nation's retail bank deposits. If only to prevent the stock market from crashing again, something needs to be done...something fairly big. One investment specialist was quoted as saying he saw fear in the eyes of Federal Reserve chairman Ben Bernanke and Treasury Secretary Henry Paulson, "the kind of fear you have on a battlefield when people are shooting at you"...as if they were afraid to tell people how much worse the situation seems to them than they were admitting for attribution.
But kudos to the Democrats for insisting on pro-Main Street provisions in the bill, such as help for struggling mortgage payers. And shame on the GOP for trying to weaken those provisions with loopholes big enough to drive a Brinks truck through. One can understand to an extent the reluctance of members of both parties to support this bill; its biggest problem is its timing, coming as it does only weeks before the entire House must go before the voters to ask that they be allowed to keep their jobs...which many fear they won't if said voters vote their outrage over a bailout perceived (rightly or wrongly) to chiefly benefit CEOs, investors and other upper-class twits and thieves.
For the moment, I'm praying to whatever God or gods there be that my banked funds will remain as safe as the regulators and the Citi and Wachovia leaders claim they are...and that what I laughingly refer to as my retirement accounts will still be worth paying into by year's end.
This is ironic for me in that, back in the 1990s, I actually was a Citibank customer, having their American Airlines-co-branded AAdvantage Mastercard credit card. It's years closed out now, but now it seems the bank that held it is claiming me again. Wachovia's problems aren't even really of its own making; among all the banks and other financial concerns they bought up in their 1990s-2000s acquisition spree was something called Golden West Financial, which was up to its armpits in mortgage-backed derivatives that are now worthless. This caused Wachovia to suddenly find itself saddled with tens of billions of dollars in uncollectable debt, most of which Citi will now assume, leaving the remainder to be covered by FDIC.
And now comes word that, for the second time this week, the proposed federal bailout plan has been torpedoed, thanks to a slew of Democratic congresscritters and twice as many Republican ones who voted against it. (Poor Junior Bush and the House minority leaders just can't seem to whip their caucus into line on this; John Boehner of Ohio led his fellow GOP House members in kiboshing the deal last week, too.) Most of the liberal/Democrat groups and bloggers I keep track of seem overjoyed that the bailout has failed again; myself, I'm not so certain that it isn't a necessary evil. Talk all you want about the moral wrongness of Main Street being forced to pony up to save Wall Street from the consequences of its own stupidity and greed, but this thing has already caused all the big investment firms and several large banks to either go tits-up and close altogether or accept being bought out by one of the only three financial giants still standing. After this week, JPMorgan Chase (where I had my checking account when I lived in NYC), Bank of America and Citi will between them control 30 percent of the nation's retail bank deposits. If only to prevent the stock market from crashing again, something needs to be done...something fairly big. One investment specialist was quoted as saying he saw fear in the eyes of Federal Reserve chairman Ben Bernanke and Treasury Secretary Henry Paulson, "the kind of fear you have on a battlefield when people are shooting at you"...as if they were afraid to tell people how much worse the situation seems to them than they were admitting for attribution.
But kudos to the Democrats for insisting on pro-Main Street provisions in the bill, such as help for struggling mortgage payers. And shame on the GOP for trying to weaken those provisions with loopholes big enough to drive a Brinks truck through. One can understand to an extent the reluctance of members of both parties to support this bill; its biggest problem is its timing, coming as it does only weeks before the entire House must go before the voters to ask that they be allowed to keep their jobs...which many fear they won't if said voters vote their outrage over a bailout perceived (rightly or wrongly) to chiefly benefit CEOs, investors and other upper-class twits and thieves.
For the moment, I'm praying to whatever God or gods there be that my banked funds will remain as safe as the regulators and the Citi and Wachovia leaders claim they are...and that what I laughingly refer to as my retirement accounts will still be worth paying into by year's end.
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no subject
Date: 2008-09-30 04:08 am (UTC)