San Diego Housing Bubble News and Analysis

The Banking system normally only keeps a few billion in actual cash on hand. The rest is lent to other banks for short term, overnight needs.

Due to the panic banks are hording cash and not lending it out to others. As of last week it was approx $90 Billion. That is why the Fed put in $180 billion in intrabank liguidity last week. It was done to give banks confidence that they didn't have to horde money.

The cash horded comes out of the liquidity pool.

John

This chart only shows Fed added liquidity. Any drop is due to the Repos maturing and the Fed not replacing them in the market. It is a huge net negative especially since the Fed and Treasury seem to be the sole sources of liquidity to the credit markets these days.

Pretty sure I heard Steve Liesman mention something about forcing a bank to fail last night/this morning on Squawk Box.

It was a one-sentence blurb, and no follow-up to the conversation, IIRC.

Just sayin'...

BOOM!

http://www.cnbc.com/id/26893741

Fed forced this to a quick conclusion. I'm going to run out of Cell minutes and my 1000 fax pages with contacting my Reps. and Senators tomorrow!

This is the kind of game that is played with our tax dollars! Everyone should be livid!

OK, capeman you win post of week.
I was ignored months back when I said that politicians would not sit idly by and let economy collapse in election year, esp party in charge. Now we know they all will do anything.

I guess conspiracy theories would say...What if this is some elaborate plan to get americans wrapped into the U.S. government. That is, first it's terrorism and about security, now it's about economic terrorism....See, you need a big government for your security and financial security...

I posted this to another thread about WaMu. I think it is relevent here too. Did this JPMorgan takeover really just happen today?

I have a checking account at WaMu, and have run out of checks. My wife sent some money to a friend a week ago, and, lacking paper checks at home, used online bill pay to send the money. Online bill pay cuts hard paper checks to recipients that can not accept electronic transfers. Today, the friend acknowledged getting the check, deposited it right away, but before hand noticed that the date of issue on the check was 9/19, and the bank issuing the check was JPMorgan, not WaMu. Sadly, the friend did not xerox the check first, so we have no hard evidence. But I believe my friend. I suspect some kind of a deal went through a week ago, but there was a big cover up and the story was allowed to break today. It seems sloppy of JPMorgan to have issued the check, but considering most recipients of online bill pay are institutions that have no idea who their customers normally bank with, it seems reasonable that they (JP) expected it would go completely unnoticed. It all seems awfully sinister to me.

From what I am hearing JP Morgan won WaMu through FDIC auction at least a week ago. If that is the case I'm sure WaMu was spending that time trying to find a better deal but couldn't and wouldn't give up the carkeys. It likely took full insolvency before management gave up and FDIC forced receivership then just handed the keys right over to JP Morgan.

There is no way this deal was fully brokered at the last minute to run so seamlessly. There is also no way that Jamie Dimon wasn't positioning for this well prior to it happening.

It's most definitely a huge conflict of interest to have Jamie Dimon on the Board of Directors at the NY Fed then feed his company multiple great acquisitions through market manipulation.

It is pretty well known that immediately before Bear Stearns collapsed the Fed cut off their access to the discount window rendering them immediately insolvent. Then JP Morgan was there to immediately pick up the pieces at expense to the taxpayer. Shame on them!

Has anyone ever doubted that WaMu was next. If one source has been consistently accurate, it's been the grape vine, and given all the speculation, I can't understand why anyone would still have an account there. With three times the deposit holdings of FDIC reserves, I'm sure the FDIC will be relieved if it is bailed out. But if it not, and the FDIC needs to cover depositors, and goes cap in hand to the treasury, the tax payer still ends up having to foot the bill.

"From what I am hearing JP Morgan won WaMu through FDIC auction at least a week ago. "

capeman, where are you hearing this? Can you give links to sources/news stories? We've been combing the internet trying to find any reference anywhere to JP having any control of WaMu prior to 9/25, but nothing turns up. I agree with your evaluation that it happened too fast, too seemlessly to have just occurred yesterday. But where's the proof? If you can point to any, I'd be truly grateful!

Maybe the Fed funded the acquisition of WaMu too, only this time they're keeping it under wraps. Here's my theory:

- News sites say JPM paid $1.9 Billion and that WM had $307 Billion in assets.

- $125B for $307B in questionable assets, though certainly not all bad, for $0.40 on the dollar

- JPM fronts 1.5% of their own to close the deal

It's a stretch but a bigger mistake would be for the Hanky-Franky-Bernanke party to stir up so much fear that the rest of the country actually does panic.

This seems like a huge win for the FDIC, though. To have that bank go under and have all deposits transferred smoothly resulting in a 2B profit for the FDIC was incredible IMO.

The FDIC got their back scratched because JP Morgan got what they wanted at an unbelievable price. With the new accounting rules though they had to mark the value of acquired assets immediately. They found a buyer of those real quick and at an appealing price still or else they wouldn't have done it.

Under, I don't have any media or print confirmation on that and according to the company memo that went out after the deal, they are still using the WaMu brand name temporarily. You likely got some fluke check but I doubt you'll be able to tie it to any proof of an early takeover. That would get some dirty dealers in a lot of trouble.

I checked the wamu website yesterday and already it has it's home page as JPMorgan. And, a statement that you can use all the ATM's etc. etc. So seamless. Now, it is fairly easy to change a website....BUT it just seems so pre-planned. They were ready to go with this IMHO.