It’s getting worse every day. Washington Mutual failed today. FDIC seized the assets of Washington Mutual and sold the banking assets to JP Morgan for $1.9 billion.
U.S. Congress is still debating whether to approve the bailout. Many banks are eagerly waiting for the free money. American President Bush warned the country about recession in his prime time television address to the nation. Even if warnings of economic catastrophe aren’t enough to win approval of a controversial $700 billion Wall Street bailout, the economy is not at risk of falling into a depression, most experts think so.
Many experts think that the current situation is not as bad as the Great Depression. Millions of people lost their savings in Great Depression when banks closed without any insurance for its customers’ deposits.
Fortunately, FDIC insures all bank deposits in America, up to $100,000 per account. So, the Americans won’t lose the savings even if the banks go belly up. But, the entire economy is going to suffer for many months to come.
If the battered credit markets fail to restart, either because the bailout fails to win Congress approval or it doesn’t work as planned, U.S. could be facing its worst economic downturn since the Great Depression
Americans are angry that their taxpayer’s money is used to bail out the greedy and stupid banks. Some Americans want the government to help their failing businesses if the government is kind enough to help out the banks. Jerry Howard, CEO of the National Association of Home Builders, said that as soon as Congress returns to work from its upcoming recess, his trade group will be asking for another package of between $40 billion and $90 billion directed towards the housing market.
Ok. How about the common man that lost his life time savings in the housing crisis or the people that lost jobs because of bad bets placed by senior management in banks?
Ironically, all the senior executives that directed and authorized the bad investments are still rich. Merrill Lynch CEO is expected to take home $9 million because of merger with Bank of America. Lehman Brothers’ CEO is not going to live in a hut either. Washington Mutual’s ex-CEO Kerry Killinger that directed sub-prime mortgages is also worth millions of dollars.
- Dismissed employees kill CEO
- Economic Pearl Harbor