John Paczkowski

Recent Posts by John Paczkowski

WaMu: Epic Bail

Add Washington Mutual (WM) to the list of troubled financial institutions felled by the current economic crisis. Thursday night, the lender was seized by federal regulators and sold to JPMorgan Chase (JPM) for $1.9 billion in hopes of preventing further damage to the country’s hard-hit economy. Under the deal, JPMorgan will acquire all of WaMu’s banking operations, including $307 billion in assets and $188 billion in deposits. “This institution was a big question mark about the health of the deposit fund,” said Sheila Bair, chairwoman of the Federal Deposit Insurance Corporation, on a conference call yesterday. “It was unique in its size and exposure to higher risk mortgages and the distressed housing market. This is the big one that everybody was worried about.”

WaMu’s failure is historic–the largest bank bust on record. The company’s assets are equivalent to about two-thirds of those held by the 747 insolvent thrift institutions and sold off by the Resolution Trust during the S&L crisis.

With more than 20 percent of global technology spending coming from the financial industry, WaMu’s failure and the collapse of other institutions are certain to have repercussions in tech. “This is game-changing,” Gartner (IT) analyst Joanne Correia said of the economic crisis recently. “People are going to stop new software deployments. They’ll cut in the applications space. In PCs and servers, everyone will stop putting in new hardware.”

PREVIOUSLY:

[Image Credit: Ape Lad/Flickr]


Twitter’s Tanking

December 30, 2013 at 6:49 am PT

2013 Was a Good Year for Chromebooks

December 29, 2013 at 2:12 pm PT

BlackBerry Pulls Latest Twitter for BB10 Update

December 29, 2013 at 5:58 am PT

Apple CEO Tim Cook Made $4.25 Million This Year

December 28, 2013 at 12:05 pm PT

Latest Video

View all videos »

Search »

I think the NSA has a job to do and we need the NSA. But as (physicist) Robert Oppenheimer said, “When you see something that is technically sweet, you go ahead and do it and argue about what to do about it only after you’ve had your technical success. That is the way it was with the atomic bomb.”

— Phil Zimmerman, PGP inventor and Silent Circle co-founder, in an interview with Om Malik