WaMu Is Largest U.S. Bank Failure
My bank, Washington Mutual, just joined the collapsing banks. The Bilderberg Group is fast consolidating their stranglehold on the United States in preparation for our merging into the North American Union. I'm moving my account in the morning!
Who bought WaMu?
J.P.Morgan!
Who?
The king pin of the Federal Reserve Scam that stole control of all US currency from Congress!
Have you read The Creature From Jekyll Island?
Its a must read!
The Creature from Jekyll Island
A second look at the Federal Reserve
by G. Edward Griffin
1994, American Media , 601 pages
A friend of mine—who is one of those rare fellows who actually worries about the national debt (which according to this link is ~$9 trillion and counting... fast)—laid Creature on me last time we broke bread together. In this tome, author Edward Griffin delivers a devastating expose on the background, execution, and remedies to the Federal Reserve Banking system (FRBS).
The system, which amounts to a national bank under control of (surprise) the money interests who dominate the government of the United States, was rather sneakily enacted into law by Congress just before Christmas recess in 1913. Creature shows how this surreptitious meeting on Jekyll Island, a private resort off the coast of Georgia owned by J.P. Morgan and associates, led to the FRBS and its seemingly unlimited license to steal continuously from the productive class.
The well-dressed thieves on the inside track were as follows:
• Nelson W. Aldrich, Republican Whip in the Senate, chairman of the National Monetary Commission, business associate of J.P. Morgan, father-in-law to John D. Rockefeller, Jr.
• Abraham Pitt Andrew, Assistant Secretary to the United States Treasury
• Frank A. Vanderlip, president of the National City Bank of New York, the most powerful of the banks at that time, representing William Rockefeller and the international investment banking house of Kuhn, Loeb, and Company
• Henry P. Davison, senior partner of the J.P. Morgan Company
• Charles D. Norton, president of J.P. Morgan's First National Bank of New York
• Benjamin Strong, head of J.P. Morgan's Bankers Trust Company
• Paul M. Warburg, a partner in Kuhn, Loeb & Company, a representative of the Rothschild banking dynasty in England and France, and brother to Max Warburg who was head of the Warburg banking consortium in Germany and the Netherlands
The men came to the island in November of 1910 courtesy of Aldrich's splendiferous private railway car; every effort was made to conceal their identities and the nature of their business. News did not leak until 1916 when a young financial reporter for Leslie's Weekly, B.C. Forbes (who later founded Forbes Magazine) wrote a story about the meeting... approvingly.
Griffin lays out the objectives of these less-than-magnificent seven straightforwardly:
1) Stop the growing influence of small, rival banks and ensure that control over the nation's financial resources remain in the hands of those present.
2) Make the money supply more elastic (i.e. available) in order to reverse the trend of private capital formation and to recapture the industrial loan market.
3) Pool the meager reserves of the nation's banks into one large reserve so that all banks are motivated to follow the same loan-to-deposit ratios; this protects at least some of them from currency drains and bank runs.
4) Should this cartelization approach lead ultimately to collapse of the whole banking system, shift the losses from the owners of the banks to the taxpayers.
What follows is history, as they say. And "history" should be the middle name of Griffin's fascinating book, which is largely a compendium of how the American and world economies developed from the dawn of the Industrial Revolution. Griffin makes everything so crystal clear, even I can comprehend it. (I can honestly assert that finally, after all the books I've read over the years on money and banking, I truly understand how the federales create money out of thin air.)
Now I see why Penn Central and Chrysler were bailed out, why Lockheed and New York City were rescued back in the day, how we got stiffed by the savings and loans debacle in the Reagan era, how both sides of virtually all wars are funded by the big banks (the Rothschild Formula). And I see the money-power rationale for sinking the Lusitania, for Pearl Harbor, and for 911—and dozens of other bonecrushing catastrophes.
War is not simply the health of the state it is the wealth of the state: it is the ultimate engine of human destruction stoked by the propensity of some men to steal from other men en masse under a fraudulent aura of civic virtue. When the war is over, they collect from the winners in tribute and the losers in reparations.
Recall the adage "he who owns the gold makes the rules." Well Creature is a story of "he who loans the gold makes the rules" (or rather loans the certificates that should represent gold but are only IOUs themselves). After reading this book, you realize that if the supply of Federal Reserve notes doubles tonight, your work tomorrow brings half as much bread to the table.
My friend insisted I never reveal who loaned me the book; I thought this a bit odd, is he truly worried that the authorities are going to come knocking on his door for dealing in state secrets?! Perhaps. But the cat is out of the bag. Naturally, Griffin proposes a quite reasonable program to pull the plug on this FRBS beast before it destroys us all.
And that's where we are. The latest antihuman thrust of the power-elite, of the Cartel if you will, has been thoroughly exhausted in Iraq and Afghanistan. Yet there are men looking to make huge fortunes through the invasion of Iran... even though that will destroy what's left of a potentially great country—ours! Such is the logic of the unconstitutional corporate state running amok.
Another salient virtue of Creature is you actually learn how honest banking might be accomplished, along with honest coinage, free from the state's giant penny in the economic fusebox. It's no accident that the leading verifiable human candidate for the presidential nomination today is Dr. Ron Paul, a wizard on the gold standard and the urgent need to eliminate the Federal Reserve, and a huge fan of Creature.
Also, check out my favorite community-money guru Thomas Greco and his bold life-giving ideas at ReinventingMoney.com. As Eckhart Tolle and other spiritual leaders attest, we're on the verge of a bold new evolution of human consciousness; we're going to need the best and the brightest of all fields to thread our way back to civilized existence... especially in the area of earning an honest buck. Creation is a great reference guide for so healthful a task.
2007 August 29
Copyright © Brian Wright | The Coffee Coaster™
Creature from Jekyll Island|G. Edward Griffin|Federal Reserve Act
WaMu is largest U.S. bank failure
By Elinor Comlay and Jonathan Stempel 12 minutes ago
Washington Mutual Inc was closed by the U.S. government in by far the largest failure of a U.S. bank, and its banking assets were sold to JPMorgan Chase & Co for $1.9 billion.
Thursday's seizure and sale is the latest historic step in U.S. government attempts to clean up a banking industry littered with toxic mortgage debt. Negotiations over a $700 billion bailout of the entire financial system stalled in Washington on Thursday.
Washington Mutual, the largest U.S. savings and loan, has been one of the lenders hardest hit by the nation's housing bust and credit crisis, and had already suffered from soaring mortgage losses.
Washington Mutual was shut by the federal Office of Thrift Supervision, and the Federal Deposit Insurance Corp was named receiver. This followed $16.7 billion of deposit outflows at the Seattle-based thrift since Sept 15, the OTS said.
"With insufficient liquidity to meet its obligations, WaMu was in an unsafe and unsound condition to transact business," the OTS said.
Customers should expect business as usual on Friday, and all depositors are fully protected, the FDIC said.
FDIC Chairman Sheila Bair said the bailout happened on Thursday night because of media leaks, and to calm customers. Usually, the FDIC takes control of failed institutions on Friday nights, giving it the weekend to go through the books and enable them to reopen smoothly the following Monday.
Washington Mutual has about $307 billion of assets and $188 billion of deposits, regulators said. The largest previous U.S. banking failure was Continental Illinois National Bank & Trust, which had $40 billion of assets when it collapsed in 1984.
JPMorgan said the transaction means it will now have 5,410 branches in 23 U.S. states from coast to coast, as well as the largest U.S. credit card business.
It vaults JPMorgan past Bank of America Corp to become the nation's second-largest bank, with $2.04 trillion of assets, just behind Citigroup Inc. Bank of America will go to No. 1 once it completes its planned purchase of Merrill Lynch & Co.
The bailout also fulfills JPMorgan Chief Executive Jamie Dimon's long-held goal of becoming a retail bank force in the western United States. It comes four months after JPMorgan acquired the failing investment bank Bear Stearns Cos at a fire-sale price through a government-financed transaction.
On a conference call, Dimon said the "risk here obviously is the asset values."
He added: "That's what created this opportunity."
JPMorgan expects to incur $1.5 billion of pre-tax costs, but realize an equal amount of annual savings, mostly by the end of 2010. It expects the transaction to add to earnings immediately, and increase earnings 70 cents per share by 2011.
It also plans to sell $8 billion of stock, and take a $31 billion write-down for the loans it bought, representing estimated future credit losses.
The FDIC said the acquisition does not cover claims of Washington Mutual equity, senior debt and subordinated debt holders. It also said the transaction will not affect its roughly $45.2 billion deposit insurance fund.
"Jamie Dimon is clearly feeling that he has an opportunity to grab market share, and get it at fire-sale prices," said Matt McCormick, a portfolio manager at Bahl & Gaynor Investment Counsel in Cincinnati. "He's becoming an acquisition machine."
BAILOUT UNCERTAINTY
The transaction came as Washington wrangles over the fate of a $700 billion bailout of the financial services industry, which has been battered by mortgage defaults and tight credit conditions, and evaporating investor confidence.
"It removes an uncertainty from the market," said Shane Oliver, head of investment strategy at AMP Capital in Sydney. "The problem is that markets are in a jittery stage. Washington Mutual provides another reminder how tenuous things are."
Washington Mutual's collapse is the latest of a series of takeovers and outright failures that have transformed the American financial landscape and wiped out hundreds of billions of dollars of shareholder wealth.
These include the disappearance of Bear, government takeovers of mortgage companies Fannie Mae and Freddie Mac and the insurer American International Group Inc, the bankruptcy of Lehman Brothers Holdings Inc, and Bank of America's purchase of Merrill.
JPMorgan, based in New York, ended June with $1.78 trillion of assets, $722.9 billion of deposits and 3,157 branches. Washington Mutual then had 2,239 branches and 43,198 employees. It is unclear how many people will lose their jobs.
Shares of Washington Mutual plunged $1.24 to 45 cents in after-hours trading after news of a JPMorgan transaction surfaced. JPMorgan shares rose $1.04 to $44.50 after hours, but before the stock offering was announced.
119-YEAR HISTORY
The transaction ends exactly 119 years of independence for Washington Mutual, whose predecessor was incorporated on September 25, 1889, "to offer its stockholders a safe and profitable vehicle for investing and lending," according to the thrift's website. This helped Seattle residents rebuild after a fire torched the city's downtown.
It also follows more than a week of sale talks in which Washington Mutual attracted interest from several suitors.
These included Banco Santander SA, Citigroup Inc, HSBC Holdings Plc, Toronto-Dominion Bank and Wells Fargo & Co, as well as private equity firms Blackstone Group LP and Carlyle Group, people familiar with the situation said.
Less than three weeks ago, Washington Mutual ousted Chief Executive Kerry Killinger, who drove the thrift's growth as well as its expansion in subprime and other risky mortgages. It replaced him with Alan Fishman, the former chief executive of Brooklyn, New York's Independence Community Bank Corp.
WaMu's board was surprised at the seizure, and had been working on alternatives, people familiar with the matter said.
More than half of Washington Mutual's roughly $227 billion book of real estate loans was in home equity loans, and in adjustable-rate mortgages and subprime mortgages that are now considered risky.
The transaction wipes out a $1.35 billion investment by David Bonderman's private equity firm TPG Inc, the lead investor in a $7 billion capital raising by the thrift in April.
A TPG spokesman said the firm is "dissatisfied with the loss," but that the investment "represented a very small portion of our assets."
DIMON POUNCES
The deal is the latest ambitious move by Dimon.
Once a golden child at Citigroup before his mentor Sanford "Sandy" Weill engineered his ouster in 1998, Dimon has carved for himself something of a role as a Wall Street savior.
Dimon joined JPMorgan in 2004 after selling his Bank One Corp to the bank for $56.9 billion, and became chief executive at the end of 2005.
Some historians see parallels between him and the legendary financier John Pierpont Morgan, who ran J.P. Morgan & Co and was credited with intervening to end a banking panic in 1907.
JPMorgan has suffered less than many rivals from the credit crisis, but has been hurt. It said on Thursday it has already taken $3 billion to $3.5 billion of write-downs this quarter on mortgages and leveraged loans.
Washington Mutual has a major presence in California and Florida, two of the states hardest hit by the housing crisis. It also has a big presence in the New York City area. The thrift lost $6.3 billion in the nine months ended June 30.
"It is surprising that it has hung on for as long as it has," said Nancy Bush, an analyst at NAB Research LLC.
(Additional reporting by Paritosh Bansal, Christian Plumb and Dan Wilchins; Jessica Hall in Philadelphia; John Poirier in Washington, D.C. and Kevin Lim in Singapore; Editing by Gary Hill and Carol Bishopric)
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