Friday, September 26, 2008

Of Howdy-Doody and WAMU

Now children of all ages can join Howdy, Buffalo Bob, Clarabelle and the lovable Doodyville characters in a good family atmosphere, the way it used to be. You will agree ... GREAT CHILDREN'S PROGRAMMING IS ETERNAL. You and your family will love that old fashioned feeling of fun and love that Howdy Doody will bring into your home. Image Credit: Doodyville

Of Howdy-Doody and WAMU

Just WHO does late night television entertainer and talkshow host David Letterman think he is … after all, he is just the Howdy Doody of the evening television airwaves who helps most people promote books, movies, and events as we all try to get some sleep at the end of a long day.

This week, Senator John McCain, the Republican Party nominee running to be the next President of the United States and leader of the free world decided to suspend his activities campaigning so that he could direct his attention on his duties as a senior Senator and presumptive head of the Republican Party on the pending liquidity crisis looming over the housing mortgage industry.

This excerpted and edited from the Associated Press –

Letterman unloads on McCain for not showing up

NEW YORK (AP) - September 25, 2008

"Late Show" host David Letterman treated John McCain's decision to cancel an appearance on his talk show more like a stupid human trick than the act of a statesman.
"This doesn't smell right," Letterman said. "This is not the way a tested hero behaves. Somebody's putting something in his Metamucil."

McCain spokeswoman Nicole Wallace said Thursday that the campaign "felt this wasn't a night for comedy."

"We deeply regret offending Mr. Letterman, but our candidate's priority at this moment is to focus on this crisis," Wallace said on NBC's "Today" show.
Letterman later asked: "Are we suspending it because there's an economic crisis or because the poll numbers are sliding?"
McCain told the CBS show that he was immediately flying back to Washington, Letterman told his audience. Then Letterman showed a TV feed of McCain being made-up for an appearance on news anchor Katie Couric's "CBS Evening News."

"Doesn't seem to be racing to the airport, does he?" Letterman said. "This just gets uglier and uglier."

As McCain spoke to Couric, Letterman shouted at the feed: "Hey, John, I've got a question. Do you need a ride to the airport?"

Letterman later said: "We're told now that the senator has concluded his interview with Katie Couric and he's now on Rachael Ray's show making veal piccata. ... What are you going to do?"
Reference Here>>

Last night, we were greeted with the news that Washington Mutual (WAMU), one of the largest banks that participated in the Fannie Mae/Freddie Mac social engineering concept which got its start in 1995 during the Clinton administration, FAILED.

President Bill Clinton wanted to try and achieve a potential 70% home ownership by the citizens of our country. He felt that in order to allow people who could not come up with the standard 20% down payment - which was the custom - the federal government could stand behind a looser, eaiser set of qualifying rules with its money (taxpayer money … read that OUR money) and help more people into home ownership.

WAMU commercial where a potential customer shouts "Whoo hoo!" as she imagines herself blistering along in a dragster on the Bonneville saltflats in an illustration as to how fast one could set up an account. Presumably, this also what happened when people applied for a home loan ... the real parachute to slow the dragster down came from JP Morgan. (Ctrl-Click to see video) Image Credit: AdFreakyFan

This Excerpted and edited from the Guardian (UK) –

America's largest banking failure sees JP Morgan pick up Washington Mutual

Julia Kollewe,, Friday September 26 2008 11:23 BST

The escalating crisis in the global financial system has claimed its biggest victim yet with the collapse last night of the US savings and loan group, Washington Mutual.

In America's largest-ever banking failure, Federal regulators seized the group's assets in the early hours of this morning and sold them to JP Morgan Chase for $1.9bn (£1.03bn).

Founded in Seattle in 1889 and known as WaMu, the group is the nation's biggest savings and loans company - the US equivalent to a British building society. The deal will make JP Morgan the largest bank in the US, ahead of Bank of America.
The face of the global financial industry has changed dramatically in the past fortnight. The US government has taken over mortgage finance giants Fannie Mac and Freddie Mac and bailed out the insurer American International Group for $85bn. Lehman Brothers filed for bankruptcy, and Merrill Lynch has been sold to Bank of America. In Britain, Lloyds TSB has agreed the takeover of the troubled mortgage lender HBOS.
The move came as the Bush administration's $700bn bailout plan for the financial sector ran into trouble. The package could have helped WaMu, but regulators decided that waiting any longer "was not a responsible decision to make," Bair said.
WaMu has seen its share price virtually wiped out after it made thousands of mortgage loans that its borrowers cannot repay, saddling it with billions of dollars in bad debts. The company has posted losses for the last three quarters, including a loss of $3.3bn for the most recent quarter, ending in June. It put itself up for sale last week but could not attract any bidders.
JP Morgan's chief executive Jamie Dimon said he was undeterred by WaMu's financial problems. "We're getting franchises of this company for a long period of time," he said. The bank will gain long-desired presence on the west Coast as WaMu's branches are concentrated in California.

In March, WaMu rejected an offer of $8 a share from JP Morgan. The company's then-chief executive was subsequently fired.
Reference Here>>

To make a long story short … WAMU, as many other banks had done, granted loans on houses with little or no collateral by people who had no ability or intention to pay and were now left being responsible for assets that were worth at least 40% less value than they had used to secure additional operating capital. Hence, the liquidity (money) dried up and the operations had to be sold to another organization … the bank FAILED to continue operations.

What John McCain did was to stop the endless promotion of his run for the highest office in the land so that he could do his job as Senator to help negotiate and focus on the interest of taxpayers.

What Howdy Doody-David Letterman did was to whine and throw a hissy fit because John McCain canceled a campaign stop-over to appear on Mr. Doody’s neighborhood due to the fact he really had better, more important things to do.

With his efforts to forge an agreement between both political parties … and to protect taxpayer interests, maybe a few less banks will succumb to the lack of cash in the housing and mortgage banking system which has its additional ripple effects on business in general.

Maybe Howdy Doody should just go to his corner of the peanut gallery and shut his pie hole on the subject … Barack (present!) Obama may not be ready for primetime but John McCain, in this time of our country’s leadership activity, does not need to be taking any “Howdy Doody Time.”

We, at MAXINE, graduated from watching “Howdy Doody Time” a long time ago – Whoo hoo!


Bill Whittle said...

On WaMu and the Liquidity Crisis:

Every decision we make is based on a risk/reward calculation. If we take away the consequences of risky behavior (with $700 billion+ with a "B" dollars), we will see more of it. And if there’s a money-back guarantee for greedy and stupid decisions, we’re in real trouble, because there is only so much money in the bank but supplies of greed and stupidity are endless.

Ken said...

I was aware 4 or 5 years ago of WAMU buying up small S&Ls; throughout the country, when they bought one that a client of mine had a loan with. Both WAMU and the S&L; they bought failed to comply with federal regulations regarding advising borrowers of the transaction, and my client continued to make his payments to the small S&L.; Ninety days later, WAMU put an adverse report on my client's credit history, causing a commercial loan, in a substantial amount, to be denied.

The client had to go to another lender, once we got the matter cleared up, and got the loan at a substantially higher rate, costing him over $250,000 in interest over the life of the loan. I wrote a demand letter to WAMU, advising them of the results of their failure to comply with the federal notification regualtion, and they blew it off. We filed a lawsuit, alleging the facts and all of the documentation, and WAMU settled the matter, paying the full amount of the demand.

The "subprime" fever is something that should never have occurred, the securities based on shaky mortgages were obviously very risky, despite the higher rates of interest that they were paying. They should have been viewed as being in the same class as "junk bonds," and the only reason they weren't is that Fannie Mae was there to buy them from the lenders, and replenish their capital. While the original idea of the Clinton adminstration, to increase homeownership among low and middle income borrowers, the idea was flawed, and forcing lenders to make shaky loans is the root cause of this failure, not "greed" and a failure of capitalism, as some are starting to say.