Saturday, January 31, 2009

WaMu's Fate Sealed 10 Years Ago

What were you up to in 1999? Hopefully not setting the course of your own destruction, as was the case with Washington Mutual. Once known as "Friend of the Family" and purveyor of hilarious ad spots, WaMu's failure left a gaping hole in Seattle's economic fabric.

Kirsten Grind wrote a terrific piece for The Puget Sound Business Journal about the demise of WaMu. If you want clear insight into the bank's slow slide into self-destruction, read her article, "Why WaMu?, Insiders detail reasons for WaMu's failure". Read it here.

The writer is dead-on with her assessment. How do I know this? Wife worked in a management capacity at WaMu for 15 years. Fortunately, she left the bank in 2007. Her comment after reading the article? "I KNEW something changed in 1999!"

Her assessment of the tipping point? When Craig Davis was appointed to run the mortgage banking division. To put it her way, "His incompetence was exceeded only by his hubris."

As is the case with any post-game analysis it's much easier to see the big picture in hindsight. Question is, what can you and I learn from the downfall of the largest thrift in America?


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