The New York Times is running a pretty scathing article today about WaMu's leap into the subprime crisis and the company's ultimate collapse. It may be some time before we get a thorough and unbiased account of what actually led to the collapse of WaMu, but if even half of what is in this NYT article is true, then things were really getting out of control near the end.
I thought the quote at the start of the article from WaMu's CEO seemed especially apt now that the dust has settled. “We hope to do to this industry what Wal-Mart did to theirs, Starbucks did to theirs, Costco did to theirs and Lowe’s-Home Depot did to their industry. And I think if we’ve done our job, five years from now you’re not going to call us a bank.” — Kerry K. Killinger, chief executive of Washington Mutual, 2003
Well he was right in a way, we certainly no longer call WaMu a bank. With the Enron fiasco, the dot-com bust, and now this subprime crisis, it just goes to show how important it is to have someone to ask is this enterprise actually creating value, or are we just moving things around and a creating a house of cards?
(Image from dkimage)