Bill O’Reilly lashes out on Barney Frank, Chris Dodd and others.

Here is a link to the bailout bill.

As most predicted, Wamu is no longer.  JP Morgan Chase has purchased the Seatle based thrift savings bank through a deal put together by Federal Regulators and is now the largest U.S. bank in terms of deposits.  Here is the good part…Mr. Fishman, who has been on the job for less than three weeks, is eligible for $11.6 million in cash severance and will get to keep his $7.5 million signing bonus, according to an analysis by James F. Reda and Associates.  Be sure to have Mr. Fishman’s legal team on your side the next time you sign a contract!  Here’s more…

In reports late Monday afternoon Bank of America has finally let go of high level executives at Countrywide Home Loans.  Brian Hale, Drew Gissinger, Tom Hunt and Rogers were all let go on a conference call and given 10 minutes to vacate their offices.  This move came as complete surprise to all the executives who were caught off guard.  Bank of America has apparently also decided to do away with the Countrywide Home Loans name. 

All this begs the question, how much longer will any of its branches stay open and how numbered are the other regional level executives days?  Its hard to say but Bank of America estimated a year to close the deal initially a point we are getting close to.   My hunch is that by the beginning of the new year the Countrywide name will all but be gone and the good parts absorbed into Bank of America.  I would warn that there is a somewhat troubling element to the new housing rescue bill that is currently being debated on Capital Hill.  Bank of America who is solvent enough to absorb Coutrywide without help may be given benefit of the Feds buying up toxic mortgage debt.  Bank of America surely will wait until a government resolution is reached, to make sure they don’t miss out.  

Hearings are taking place on Capital Hill as this post is written debating who will get benefit from the new $700 treasury bailout to buy distressed mortgages.   No one including Secretary Paulson or Chairman Bernake know what these mortgages and the assets they are tied to are worth.  This is a big question as no one wants to let the banks receiving bailout to profit from the sale.  On the flip side the goal is to prop up Wall Street banks and get them lending again.  If the assets are sold for too little to the goverment they could lead to an eventually bank collapse anyway.  Stay tuned as more news is surely to come.

You may think your accounts are covered simply because the FDIC logo is hanging in every corner of your favorite banking branch, but that may not necessarily be the case.  It’s a common misconception that each account is covered in the amount of $100K.   Wrong…it’s not that simple! All single accounts owned by the same person at the same insured bank are added together and the total is insured up to $100,000.  If Bob Banker has a personal FDIC insured checking account and a personal FDIC insured savings account both held in the same name at one bank then his coverage is only $100K total.  Now, Bob could extend his coverage by using different account types and adding additional names to his account.  If Bob’s savings account was actually “joint account”, held with his wife for example, then that could get the couple $200k worth of coverage. The $200K would be split equally amongst each owner, so Bob and his wife would each have $100K worth of coverage in addition to any personal account coverage.

There are eight ownership categories and understanding them may just help you increase your amount of FDIC coverage.  A living trust may provide you with extra security as well by offering coverage not only to the account owners (trustees), but also the beneficiaries.  Learn more about how a living trust can boost your coverage by contacting The Lawyer in Blue Jeans and by checking out the “ownership categories” link on the FDIC page.

Here is a handy FDIC estimator.  While not a guarantee, I think I’ll trust it more than a local teller.

With the events of the week, larger than life corporate entities found themselves scurrying for financial backing and looking for any avenue that might rescue them from ultimate peril.  In some surprising maneuvers, the US Gov’t becomes the knight in shining armour, doling out money to more than one securities firm but leaving Lehman Bros. off the list.  AIG was also the recipient of a commitment by the Fed to lend $85 billion in exchange for a 79.9% stake in the company.  That said, many are now wondering how Man U will react to a potential change in the name of their largest corporate sponsor from AIG to USA or FED.

Did Man U bring the new uniforms out too soon?

And we thought trying to overcome last Monday’s news was tough! Today sets a new record and sets us up with countless talking points. BofA takes over Merill, Lehman Bros. is out of luck and AIG is feeling major pain. Where can you feel safe with your hard earned dollars? Check out FDIC’s guidelines on their site, or listen to today’s show and have it summarized for you!

Countrywide has just announced that as many as 2M of their customers may be victims of identity theft. http://www.winknews.com/features/action/28161944.html

Kerry Killinger, the legendary CEO who built WaMu was ousted this past Monday.  Unfortunately, Wamu investors don’t seem too confident in the new leader either.  Wamu’s stock has dropped by more than 50% over the past 3 days!  I think we may see an FDIC flag flying in place of Wamu’s real soon and JP Morgan will likely take them over shortly thereafter.  I love my Wamu, but I think a JP Morgan takeover would be a good thing.

We joked yesterday on the show that the U.S. Goverment’s seizure of mortgage giants, Fannie Mae and Freddie Mac may just immediately fix all of our problems. 2 things to remember. 1) Nothing works faster than Afrin (no, they are not a sponsor). 2) We need to allow the market some time to digest the news and see how things pan out. There has been one immediate reaction and that has been an increase in the FNMA Bond price which is up by slightly over 100bps since Monday’s open. Mortgage rates have fallen by about a half of a percent as a result and borowers are taking advantage. 30 year fixed rates are now well below 6% in many cases.