US Banking System + Washington Mutual (WaMu)

[Xzin]

I'm interested in this statement, care to expound on this idea?

It involves rapid prototyping technology and some rather fun and exciting custom manufacturing. Unlikely that it will change the world but is quite fun. Should be a good venture for a few years to tinker around with and grow.

[Havelcek]

I'm interested in this statement, care to expound on this idea?

It involves rapid prototyping technology and some rather fun and exciting custom manufacturing. Unlikely that it will change the world but is quite fun. Should be a good venture for a few years to tinker around with and grow.

You should invent working real-life totems!

[Suvega]

I don't like to post an off topic message as a general rule. But this is important.

I am not trying to cause a panic here but as an active investor, I watch the markets very closely. There has been considerable concern about many banks - from investment banks, extending to stalwarts of industry that are failing left and right. Goes with the territory when you leverage yourself 30x or more. While FDIC insurance exists, it fails to cover account balances in excess of $100,000.00. Plus, it is grossly underfunded and payouts can take months or years. There are a number of banks that will implode or have already. Some are difficult to forecast but there are usually warning signs. I would urge anybody who banks with Washington Mutual (WaMu) to look at their numbers and make an informed decision as to if that institution is the type that you feel comfortable leaving your money in. Myself? I would not touch it with a 10 ft pole. If you are in excess of the 100k limit, at WaMu or elsewhere, you are a fool. It is possible somebody buys WaMu and bails everything out but why bet the farm on it? Take the time to consider current market conditions and ensure you take the proper steps to protect yourself.

A) Investing greater then 100k in any bank = bad idea
B) Although the above is prbably smart for teh individual investor, everyone that removes theie money from a stressed bank is just causing a ripple affect.
1929/30/31 was makred by everyone trying to withdrawl there money from their bank, the bank entering bankruptcy. Rinse repeat x 3000.

[Suvega]

Furthermore, good warning to an upcoming bank solvency issue:

Watch their bond ratings. When they start getting degraded, that means they'll have to offer higher interest rates to raise capital.
In layman's terms:
When their ratings go down, it costs more for them to function.

WaMU just hit junk bond status (B- I think). GG have fun with that.

[Xzin]

B) Although the above is prbably smart for teh individual investor, everyone that removes theie money from a stressed bank is just causing a ripple affect.
1929/30/31 was makred by everyone trying to withdrawl there money from their bank, the bank entering bankruptcy. Rinse repeat x 3000.

A run on the bank is caused by enough people no longer having faith in the institution. The people who do not act get wiped out, thus creating a sudden need for people to all withdraw their money. Until we move away from a fractional reserve system that loans every deposit out 100:1, we will continue to have these problems in times of crisis. And probably rightfully so - institutions that are failing should not be institutions that are solvent simply because you "should keep your money there to avoid a run on the bank". Classic cartel, prisoner's dilemma, etc. And we know how those turn out.

[Suvega]

Well XZIN w/o the modern banking system that you are so freely to call out it's weaknesses, you would have no money for your startups.

Lack of capital = fail.

Maybe you don't have any loans, but somewhere down the line your investors relied on the fractional banking system to generate wealth.

[Sarduci]

I actually work with a decedent of the Mr. Duer from this article. He's quite proud that his family crippled the national economy in one swoop.

http://www.americanheritage.com/arti...999_3_20.shtml

[Xzin]

Well XZIN w/o the modern banking system that you are so freely to call out it's weaknesses, you would have no money for your startups.

Lack of capital = fail.

Maybe you don't have any loans, but somewhere down the line your investors relied on the fractional banking system to generate wealth.

I self funded my first startup and never once obtained a bank loan for it. Leverage works both ways.

[Xzin]

WaMu is getting hammered. Looks like JPM is going to buy their deposits.

http://news.yahoo.com/s/nm/20080926/..._jpmorgan_news

[Suvega]

Well XZIN w/o the modern banking system that you are so freely to call out it's weaknesses, you would have no money for your startups.

Lack of capital = fail.

Maybe you don't have any loans, but somewhere down the line your investors relied on the fractional banking system to generate wealth.

I self funded my first startup and never once obtained a bank loan for it. Leverage works both ways.

You or your investors, or the person who bought it never used a loan to finance any of it?



Then you had the worst finacial structure possible. L2leverage