The Home Front

Although Washington Mutual already had its hands full with a struggling mortgage portfolio—posting a $3.3 billion loss last quarter alone—it was a deposit run sparked by the bankruptcy of investment bank Lehman Brothers that led to the collapse of the Seattle-based banking company.

Federal regulators closed down WaMu and announced an agreement to sell most of its operations to JPMorgan for just under $2 billion on Thursday. The downfall of the $307 billion-asset WaMu represents the largest banking failure in U.S. history, dwarfing the 1984 failure of the $40 billion-asset Continental Illinois, which had previously held the distinction.

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Even wonder which cities are safest from natural disasters? In its 2008 US City Rankings, SustainLane tackled the question:

From the 2008 SustainLane US City Rankings:

SustainLane examined the 50 largest US cities, assessing natural disaster risk. This ranking was devised with SustainLane primary research as well as with information from Risk Management Solutions. We looked at hurricanes, major flooding, catastrophic hail, tornado super-outbreaks, and earthquakes, taking into consideration potential frequency of disaster as well as the extent of damage.

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Here's a look at some additional troubling fallout from the government's recent takeover of mortgage finance giants Fannie Mae and Freddie Mac:

From the American Banker:

Count Gateway Financial Holdings Inc. as another casualty in the government takeover of Fannie Mae and Freddie Mac.

By all accounts the $2.1 billion-asset Virginia Beach, Va., banking company has been a good performer, boasting fast growth and strong asset quality. But late last year it bought $40.4 million of Fannie Mae and Freddie Mac preferred stock that became nearly worthless when the government took them over this month.

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Speaking at a hearing on Capitol Hill Wednesday, Sen. Charles Schumer, a New York Democrat, outlined several components he would like to see incorporated into the bailout, including the following:

From Schumer's prepared statement:

Spending the $700 billion in installments:

I think we must seriously consider putting this program in place in tranches, or installments—so that we do not limit the Secretary's ability to act as necessary, but are able to evaluate the effectiveness of these expenditures over time. If the program is working, the Congress will certainly ratify continuing expenditures by the Treasury. But if it is not working, then we will need to review it before we once again find ourselves on the brink.

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