Moo, Moo

Chase is buying Washington Mutual, the country's largest saving and loan. Since WaMu's stock has been down-graded to below junk, it's worth almost nothing. The announcement came after close of business today, most likely because the Fed typically closes down banks and S&L's on Friday.


Since I wrote that a few minutes ago, I've learned that WaMu got shut down on a Thursday. There had been an un-reported run on the bank beginning September 15. When it's bad enough that a bank gets shut down other than on a Friday, going against regular Fed policy, it's really, really, really bad.

Either that, or they're playing politics and trying to press the issue of a bailout on their terms with Congress. First they had a deal, and now they may or may not.

Either way, it's not good news.

I have been predicting the failure of Washington Mutual for months now, as their stock has gone down and down and then down some more, finally settling at 5% of what it was worth 6 or 8 months ago before it got shut down. And like most of this financial fiasco, watching them bleed to death has been like watching a train wreck in slow motion.

I am afraid that today's monumental events are a harbinger of things to come: a cascading series of bank failures that could possibly overwhelm even the FDIC. Chase and Bank of America can't buy every failing bank and financial institution. Most of them are going to fail the old-fashioned way.

Flat on their faces.

My boss, who's been around for a long time (I won't reveal her age as a point of discretion and honor), says we're living in unusual times. She's been around for a while and seen pretty much everything. She stood in line to get company money from a failed S&L back when they all melted down.

She sees the world through the lens of history and experience. Her instincts are usually right.

She's nervous, so I'm scared.