Wow.

It's official--Washington Mutual is done. During its more than one hundred years in business, it survived two world wars, the Great Depression, and countless scandals over the years. It's not the end of the world, but it does sadden me. I read that the final straw came because depositors had taken out about $15 billion fearing that the bank would fail. Granted, it probably would have failed anyhow, but a bank run? How stupid do you have to be? It's FDIC insured. Unless you're stupid enough to keep more than $100,000 in your account ($200,000 for joint accounts). If you keep that kind of cash laying around in a bank account, you deserve to lose it anyhow. Do people not realize this?

I feel like I'm somewhat ahead of the tread. Bank failure didn't become the "in thing" until IndyMac went under. My bank, NetBank, failed last year. So ha! Been there, done that, and when my bank failed, I didn't even find out until about a month after the fact! But it wasn't a big deal, all things considered, and I wouldn't have changed anything even if I knew the bank was failing. The assets were sold to ING Direct, and I find it a perfectly acceptable place to do business with now.

As for the Mother Of All Bailouts (MOAB), the $700 billion that's being thrown around, I find that incredible sum to comprehend. But all-in-all, I find myself not especially concerned about it either. Keep in mind, that number is likely far higher than the final cost to taxpayers would be. It's to be used to buy up a bunch of lousy mortages, but those mortages aren't worthless. They are still assests with real value. Not as much as banks originally thought they were, but there is still some value there.

I also find it heartening when I hear reports about US Sam taking equity stakes in some of these institutions--it's the least we deserve for bailing them out!--and even perhaps taxing certain financial transactions on Wall Street to ultimately cover the cost of the bailout. I don't mind using taxpayer money to bailout Wall Street--as long as Wall Street ultimately pays for the bailout in the end. I'll be considerably more upset if I felt taxpayers wouldn't get most of that $700 billion back in the end. I'm optimisitic, though. And I'm pleased that they want to restrict those golden parachutes so the folks who got us into this mess can't walk away with millions in severance. It's appauling how so many CEOs can drive a company into the ground and get paid millions while doing it.

I'm not even terribly concerned about the "moral hazard" of bailing out Wall Street--the theory that if we bail them out, they won't learn their lesson and take stupid risks in the future thinking if things get too bad, the government will just bail them out again. Bailing out Wall Street doesn't mean they won't suffer. Oh, they have. Stockholders have gotten all but wiped out. The most wreckless companies have blown up completely or been bought out for pennies. Capitalism at work, and it is good. They're feeling the pain of their mistakes. A bailout isn't going to change that.

Remember last year when it seemed like wealthy mid-east folks were investing billions in some of those faultering banks? Terrible, wasn't it? Even the Crystler Building--and what's more American than the Crystler Building?--was bought by foreign investors. In hindsight, I'm rather happy to see them blow billions of dollars on our failed institutions. Better them than us, right? ;o)

I find the fear permeating the market exciting. Stocks as a whole are cheaper than I've ever seen them before, and I'm more optimistic about the stock market than I've ever been. Apparently, my view is quite rare--I read recently that more people expect the stock market to be lower one year from now than has ever been recorded in my lifetime. Oh, if only I had more money to invest..... Unlike Wall Street, however, I'm not willing to take on debt to buy more assests. Stocks very well could continue going lower, and those margin calls could be a problem if they did. I suspect in the next few years, though, I'll make a killing with my investments. If stocks stay low or (even better!) continue to fall, I'll be scrimping and saving every cent I can to buy more.

As long as I'm a net acquirer of stocks, I'm thrilled with stock prices going down. You hear about inflation going up, but then everyone is depressed that the price of stocks is going down. Hello?! Why does everyone want to pay more for stocks? *shaking head* Why aren't stocks considered when they figure out inflation rates? I spend more on stocks than I do any other single item. Even managed to max out my IRA contributes this year. Sweet! =) (On a sad note, however, the stock I wanted to buy with it went up over 20% in the time it took for the check to work it's way through the mail and get deposited into my account. Argh! I still bought the stock, but I wasn't happy to pay 20% more for it just because the check took a few days to make its way into my account.)

Exciting times, indeed! Take advantage of it!