WaMu

How about an aphorism for this situation.....the first one that comes to mind is from NPR's Car Talk "Don't drive like my brother"

So, so, you've likely heard by now. Washington Mutual has failed, seized by the FDIC, assets sold to JP Morgan Chase. Our checking account is at Washington Mutual, has been forever, there's a local branch. That part is ok, I think.

But as the price of WaMu's stock tumbled and tumbled, people in my community began to wqnder "Maybe I should buy some WaMu stock, the price is so low" 52 year high is $39, it's now at $3, what a bargain. It will probably come back or else be bought by another bank and then I will own other stock. Many people talked, few people acted.

But I did. As I watched everything else tumble, I thought why not do some bottom feeding myself? Instead of watching all that net worth fall and fall, why not do something about it? So, I called up Wachovia and, over the phone, bought 1500 shares of WaMu at 3.89. Yup, I was the smart one, I will make money on this. Of course, I had to pay a $240 commission but I will easily make it back.

That was last Friday.

The stock fell further and further. Hey, there's still time, I say.

Then last night, the FDIC acted. Now, if I was well informed about banking institutions, I might have realized that would happen. But I didn't. And since Morgan bought the assets from the FDIC and not from WaMu, the stock is worthless. Shareholders of common stock are paid last. And since WaMu no longer has hardly any assets....

Dang. That worked out well NOT!

And I have only myself to blame. Poor attempt at bottom-feeding.

So luckily, the loss of 6K is not catastrophic. I knew I might lose it, I just didn't think it would be this FAST.

So can we put some positive spin on the fact that I now own 1500 worthless shares? Yes, of course!

1. I'm now part of the developing news story
2. I no longer have to pay a commission on the sale, yes!
3. This will make a dandy tax loss
4. I could possibly be involved in some entertaining class action lawsuits.

See, I could make money on this deal, ya never know.