Photo by The Tim
The official layoff count for WaMu was made public today. According to various news sources, JPMorgan Chase will be cutting 3,400 jobs in Seattle.
JPMorgan Chase is laying off 3,400 Washington Mutual employees in Seattle, according to spokesman Tom Kelly. That’s more than 80 percent of the 4,300 people it employs in the city.
Most branch workers will keep their jobs, however.
WaMu’s former headquarters city is taking the brunt of the 9,200 WaMu layoffs that JPMorgan is making nationwide.
This is even more than the estimates we heard just a few weeks ago, when anonymous WaMu executives were cited in a Times report that said “as many as 3,000 of WaMu’s 4,200 workers in Seattle could lose their jobs.”
Fortunately it sounds like those that are losing their jobs are at least being given pretty nice severance packages, and many will have lots of time to find new jobs. It still hurts to lose a job though, and I sincerely hope that those affected by the massive bank failure are able to keep on their feet through these difficult economic times.
(Melissa Allison, Seattle Times, 12.01.2008)
softwarengineer » Dec 1, 2008 at 2:41 pm
I CALL IT “BANKING WOLVES GUARDING THE MAINSTREET HEN HOUSE”
And the wolves were having so much fun destroying mainstreet, the layoff fires got to them too.
Since America’s uncontrolled growth credit crisis caused this mess, can any of you bloggers offer a clear and simple explanation, that I could believe, that even more uncontrolled growth won’t make it even worse?
Andy » Dec 1, 2008 at 6:27 pm
I would not dump all financial professionals into this bucket. This was mortgage brokers, home speculators, real estate agents, lax lending by dumb banks with no risk management, low interest rates by the fed, and stupid buyers paying $500 per sq foot.
All were resposible, and they all want this to start again. The only “somewhat” sane parties are the banks (recognizing their stupidity – no more money to lend) and home buyers are (laughing at home seller prices).
NAR, MBA, and the government want you to buy a home. Please so we can make our 5% residual…lol.
Rhonda Porter » Dec 1, 2008 at 8:31 pm
Andy, I’m sorry, there are just as many slimy mortgage bankers as there are brokers per capita. Anyone who originates a mortgage has the opportunity to take advantage of a borrower. The biggest difference between those that work at a bank and those who work for a mortgage broker is that the mortgage broker has to disclose how much they’re making on the backend (YSP) and the mortgage banker does not.
Let’s not forget that it’s banks, WaMU for example, who created the products like option ARMs…a WaMU speciality and who used mortgage brokers as their pushers. WaMU still created, underwrote, approved and funded those loans. Mortgage brokers did not.
I do feel for our local economy getting hit for this significant job loss and I do feel for the families impacted. This is not a good market to be looking for a new job–especially in this industry! But, I just had to give you my thoughts on view of mortgage brokers.
Eleua » Dec 1, 2008 at 8:32 pm
I would bring all this back to people not doing their DD with things as mundane as money markets and all the various bond insurance schemes.
Banks didn’t care about creditworthiness because they knew they could sell their dreck to idiots that ran MMs. The MM managers were groping for yield, which caused them to gravitate toward subprime paper. Since RE always goes up, it was a sure thing.
Without an end market of morons, the entire chain of RE speculation would not have happened. The US.gov giving implied guarantee to all these mortgages only made things worse.
Risk was priced out of the system. Risk is trying to get priced back into the system, but the US.gov is backstopping everything on the planet to keep that from happening.
Risk is going to win this.
About WM…
I do feel bad for the employees. WM was one of the worst offenders of capitalized interest and their shareholders were dumb enough to buy it.
WM will not be the last big one.
Rhonda Porter » Dec 1, 2008 at 9:18 pm
Banks have given easy credit not only in mortgage but in credit cards too. Consumers are going to be whammo’d with reduced credit lines, higher interest rates and no way to use their home equity to forgive their bad financial choices.
Bes2wait » Dec 1, 2008 at 10:11 pm
I just got layed off today. I worked for a medium sized home builder, it was the third round of lay offs. Be careful folks its ugly out there, very ugly.
Garth » Dec 1, 2008 at 11:39 pm
Real estate and financial advisors are now a notch below lawyers in the eyes of the general public and will be for years. If you sell mortages, insurance, retirement or houses you are going to need a thick skin for quite some time.
The good news for the rest of us is all of the jokes work.
Andy » Dec 1, 2008 at 11:44 pm
Rhonda,
Actually, the real estate agents, mortgage brokers, and appraisers (working in lock-step) send all their false (forged) income docs/property appraisal to some idiot underwriter at Wa Mu – that cannot wait to hit the road at 2:30PM to beat traffic – usually just sits around growing a trendy Northwest beard – he/she looks it over and decides to allow the $900K jumbo loan ARM to some hicks from Puyallup – making $50k combined in a good year. There is the cause of the mortgage crisis.
Paying off/ pushing business towards an appraiser is a common practice for a RE agent or mortgage broker trying to flip or refinance a home. Everyone knows the game and these people make their livings off of this. They inflate the value of the property (usually with false comps). Usually, the homeowner is not sophisticated and relies on bright eyed RE professionals. However, the RE professional only cares for the buck. Ergo, it’s not a tough racket, just get them to sign on the line which is dotted.
How do I know this: Well, I met plenty of mortgage/Real Estate guys out (at the bar) after they had scored a nice $10,000 commision. They tell all the stories and I think that we should understand their tricks!
I’m praying that past appraisals + price manipulations are investigated for every home sold over the past 6 years. I’m sure the feds will get their hands on hundreds of Real estate agents, mortgage brokers, and appriasers with no ethical concern.
Just watch Glengarry Glenross – Real Estate is a slimy business. The handful of honest brokers that actually believe that this market is rediculous should be asking for 50-70% discounts on prices for their clients. If any real estate agents out there would be so kind as to join our chorus, this market will begin to find a bottom – finally.
Buceri » Dec 2, 2008 at 5:00 am
Bes2wait – I am very sorry for your job loss. And I agree; it’s tough out there.
2009 will be brutal. There is no way around it.
Anyone in the financial sector will find it really tough.
+veLooker » Dec 2, 2008 at 6:06 am
Anything that goes up needs to come down (at leat on planet Earth).
I think its part of a cycle. Lets not blame anyone – banks,realtors, stupid buyers…
Even I am affected by this bad market. I did not buy or sell a house till now. I have been waiting for a long time (reading this blog and other blogs) to see when real estate market is going to be reasonably priced in Redmond/Bellevue. If the market would have been reasonable, I would have bought a home by now and spent time on working on some of my ideas and thereby improving productivity instead of waiting to hear a mortgage/real estate crisis.
Lets see this problem does not appear in future with strict regulations.
alex » Dec 2, 2008 at 8:00 am
Andy@8: “…cannot wait to hit the road at 2:30PM to beat traffic – usually just sits around growing a trendy Northwest beard – he/she looks it over and decides to allow the $900K jumbo loan…”
=========
A female mortgage underwriter who grows a trendy northwest beard and allows 900k jumbo loans before hitting the road at 2:30pm… what a lovely character!
Andy » Dec 2, 2008 at 8:14 am
Sorry,
I’m being overly rude. I just cannot stand this beard culture. It’s so unclean and shifty looking. Many men here think that they are some sort of enlightened lumberjacks…
As for being sorry for Wa Mu employees. Most people working in banking can expect volatility. Depending on your skill-set you can certainly offshore to other high growth areas. I’ve worked for a hedge fund that blew up – no bonus, no severance, and two weeks. I found a job making more than previously – and did not miss a beat.
JP Morgan is being exceedingly generous with their severance. I got nothing – and did not expect something “coming to me” for all my hard years. Crap happens, go find another occupation or go back to school – even if you are 60 years old. Complaining or feeling sorry will never get you out of the hole or feed your kids. Just keep swinging the bat….
obelus » Dec 2, 2008 at 8:58 am
Andy,
You really have to get over this beard thing.
singliac » Dec 2, 2008 at 9:59 am
Andy, let’s talk about what’s really going on here. You can’t grow a beard, and it tears you up inside. It’s going to be OK. I can’t grow a beard either, but I’m coming to grips with it. Maybe we can start a support group.
Brian » Dec 2, 2008 at 10:07 am
I can grow a neck beard. Does that count?
patient » Dec 2, 2008 at 11:08 am
I got a beard, it goes with the dirty renter image.
Scotsman » Dec 2, 2008 at 11:49 am
Sometimes I won’t shave for a couple of days- but I haven’t had a real beard since college. Does that make me hip, or just a slob?
Dave Lincoln » Dec 2, 2008 at 12:08 pm
b) slob *
but, it’s those bearded girls at the bank corporate offices that really keep me up at night (no, not in that way, you sick people!). Funny, Alex!
* Unless you live in Seattle and wear a Che or other commie shirt to go with it. Then, it’s OK
BanteringBear » Dec 2, 2008 at 12:14 pm
Andy- get a grip. Different strokes for different folks. We’re in the northern climes here; beard weather. I might just grow one in case we run into each other. Then, you can seethe inside while ogling my beard. I’m with singliac on this. I think you have beard envy.
Brian- LOL! Please grow the neck beard. It counts DOUBLE. In fact, send some pics. A neck beard is sure to send Andy over the edge.
The Tim » Dec 2, 2008 at 12:21 pm
This one’s for you, Andy.
;^)
BanteringBear » Dec 2, 2008 at 12:42 pm
Here’s a nice beard:
http://mypetjawa.mu.nu/archives/hidininbeard.jpg
EconE » Dec 2, 2008 at 12:49 pm
@#20
Cat Stevens…is that you?
;^)
Put me in Scotsman’s “slob” category.
Lake Hills Renter » Dec 2, 2008 at 1:51 pm
I’ve had a beard for 10+ years, since before I moved to the PNW. =P
Rhonda Porter » Dec 2, 2008 at 4:41 pm
Andy, I hope every slimy person — including borrowers who knowingly overstated their incomes, is caught if they committed fraud, which is what your comment sounds like to me. This will include mortgage brokers and mortgage bankers. Let’s not forget it was WaMU who the NY Atty General was after for forcing appraisals to come in at a specific amount. I would say a majority of those transactions were originated from WaMU loan centers.
Don’t get me wrong, I’m not saying mortgage brokers are innocent, they’re not. They are no more or less innocent than mortgage bankers.
I must be doing something wrong (or right) with my business because I have NEVER earned a $10k commission and my highest loan amount was (pre-melt down) just shy of 1mil.
I do know there are LO’s out there who are more transactional based. Maybe most are…they will make the most off of an individual during that transaction that they can because they only care about that transaction closing (paycheck). They are not relationship based with their business practice and do not care about returning clients or clients referring anyone to them. I really hope that this market drives those (transactional) jerks out of this biz.
I agree with a lot of what you’re saying–but I’ll argue until I’m blue in the face that bankers are FAR from innocent in this mess.
Kittitas » Dec 2, 2008 at 11:12 pm
I used to fall timber for a living, but with the market the way it is all I have to do now is sit around growing a trendy Northwest beard. And yes I did become more “unclean and shifty looking” in just the few minutes it took to read this thread….
And Brian, I also believe the neck beard counts double, so throw that razor away!