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Mrs. Tragula wants you …

September 26, 2008, 9:34 am

… to have some perspective.

The failure of Washington Mutual put at risk $1.9 $188bn in assets deposits, or $1,900,000,000 $188,000,000,000.

US GDP today is about $13,800bn, or $13,800,000,000,000.

The assets deposits put at risk represent therefore around .01% 1.4% of GDP. Which is a big deal, and we’re glad for the FDIC and JP Morgan Chase.

Consider, though, the failure in 1930 of Bank of United States. (Note: the absence of definite articles is critical, this was a private bank, not an official entity.) It’s supposed to have put at risk maybe $160m, or $160,000,000.

Which makes it sound smaller than the failure of WaMu, widely described today as the largest bank failure in US history.

But US GDP in 1930 was around $91.2bn, or $91,200,000,000.

So the 1930 failure put at risk perhaps .18% of GDP.

UPDATED TO SAY: And therefore I was wrong, the WaMu failure is bigger, in terms of deposits put at risk. I’m sorry.

UPDATED again to say, see here.

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