Earlier today, banking giant WaMu, was put into a conservatorship by the U.S. Treasury. That’s a nice way of saying that the bank was failing and failing fast. I’m of the opinion that if they can’t handle their money very well and fail, then let them fail. Sure it disrupts things, but that’s the American way. Or it was. Now we just print/mint more money to bail these businesses out and off they go. How come nobody bailed out Enron? And don’t tell me it was because of the fraud stuff going on. You should note that several other institutions that have “failed” and been put into a conservatorship recently were announced as being under investigation for fraud.
That’s neither here nor there though.
Later this evening, it was announced that WaMu was being bought by another financial giant, JPMorgan Chase. What we are now seeing is a consolidation of many of the failed banks. It’s the cycle of business life. Businesses near failure and get bought. Or fail. Some just slip into the ether and are never heard of again. But if this continues, we’ll only have three or four major banking businesses around. Not exactly horrible, but it makes it pretty hard if you dislike a couple of them.
With a bailout looming for the economy (with money freshly minted from thin air) we might begin seeing a turn around. I kind of doubt it however. The Government doesn’t have the 700B that Paulson says it will take to bailout the economy so they’ll weaken the dollar to nearly nothing by doing it. Sure, it’ll weaken if they don’t, but we can’t just go around making money as we go.