What caused the largest bank failure in history?
- Idiotic mortgage lending
- A bad financing deal (death-spiral investment from TPG, et al), and…
- A run on the bank.
WaMu (WM) depositors panicked on September 15, after Lehman Brothers failed. In the 10 days since, they have pulled out $16.7 billion of deposits , or 9% of WaMu’s deposits as of June 30.
Where have the deposits gone? Well Fargo (WF), among other places. Let us hope that Wells Fargo’s balance sheet is as strong as management says it is.
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