The Downfall Continues
Sometimes it’s exciting, breathtaking even, to stand on the media’s rooftop and watch the fiery implosions of our economy.
Today, I found that the bank I keep my money in, Washington Mutual, has fallen. The government seized the enormous thrift on its birthday and quickly sold it off to JP Morgan & Chase. This is the biggest banking collapse in U.S. history.
The recent failures reminded me of stories of earlier decades, about how people would gather on a mesa somewhere and watch the U.S. military conduct nuclear tests. First there was the flash, then the picturesque cloud formation. Then the echo of the blast wave struck, dousing the hapless observers with radiation.
The Washington Mutual collapse is nothing I didn’t see coming. But before, I was merely watching the devastation from afar. Now, I finally feel its heat.
The FDIC says that my money is secure. They did not have to reach into their coffers for the (how strange it is to say this) measly $45 billion. Though consolidation continues on Wall Street with JP Morgan and Bank of America reaching supergiant status, I wonder how long the mightiest pillars can continue to stand.
It’s strange. I’d heard about panicked citizens standing in lines, waiting for their money in the decades gone by. I could never imagine what that must be like. Now, that situation actually has a chance of happening. Today, some of WaMu’s legion of customers will be at their branches, pulling out hard. I will be among them.
Other questions smolder in my mind – what will happen to my student loans? Will I be able to receive the amount I need? How will New York handle the cut in social services? And will other nations, tired of United States’ fading superpower status smell blood in the water and assert themselves?
I don’t know. No one knows. The bailout is in limbo with Democratic and Republican opposition to Paulson’s plan. Apparently the treasurer got down on one knee in front of Pelosi, which, while a joke, symbolizes the entire predicament of taxpayers being asked to pick up the unfortunately necessary bill.
Allright. Enough doom and gloom out of me. Here are some cheering news about smaller banks apparently thriving through the crisis. If we survive this one without a depression, the fall of the investment banks and centralized risk players may even be a good thing. With all the consolidation, however, the number of players had diminished and their power, greatly increased.