Near Perfect Storm

WaMu: 'Near Perfect Storm' for Housing

I have an account at WaMu so this story is of great interest to me. The following link is several hundred pages long, just so you know.

Washington Mutual's 2006 Annual Report

Page 136:

Total Time Deposits (2006): $95.082 billion
Total Time Deposits exceeding $100,000 (2006): $20.51 billion

One wonders how much of that $20.51 billion is uninsured by the FDIC. It isn't easy to tell.

How much insurance coverage does the FDIC provide?
The $100,000 amount applies to all depositors of an insured bank except for owners of certain retirement accounts, which are insured up to $250,000 per owner, per insured bank.

In any event, the odds of me keeping $100,000 or more in a bank that sees a "near perfect storm" are too low to calculate. Assuming I am not alone in my thinking, this may put additional pressure on Washington Mutual. We saw it happen elsewhere last month. That could, in theory, turn a near perfect storm into a perfect storm.

A rush to pull out cash
Worried about the stability of mortgage giant Countrywide Financial, depositors crowd branches. In Laguna Niguel, Bill Ashmore drove his Porsche Cayenne to the bank's office and waited half an hour to cash out $500,000. "It's got my wife totally freaked out," he said.

So how are things going for Countrywide right now?

Countrywide outlines job cuts, strategy shift
Countrywide Financial Corp. said it plans to cut up to 20 percent of its workforce and shift its residential lending business into its thrift subsidiary.

This is not investment advice. If I had all the answers I wouldn't be sitting here typing at you. I'd be sitting on a beach somewhere, enjoying the sun, with my only concern being that of the water (nearly drowning in liquidity?). In sharp contrast, I'll be climbing the ladder today to clean out my house's gutters, yet again. The joys of homeownership never cease, lol.