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Originally published October 19, 2008 at 12:00 AM | Page modified October 19, 2008 at 11:40 AM

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Sunday Buzz

WaMu president tests market with $6 million home

Stephen Rotella, president of WaMu when it failed last month, has put his Seattle home on the market for $6.25 million.

Rami Grunbaum, deputy business editor, and Seattle Times Business staff

Don't try any of that subprime, option-ARM, low-doc/no-doc funny stuff when trying to buy this house.

Stephen Rotella, who was president and chief operating officer of Washington Mutual when it failed last month after being battered by mortgage losses, is wading into the housing market as a seller. He's hoping to sell his home on Capitol Hill for $6.25 million.

County records show he and his wife, Esther, paid $3.78 million for it in June 2005, a few months after Rotella arrived in Seattle.

Rotella and several other top executives were shown the door by JPMorgan Chase (his former employer), which bought most of WaMu after the failure.

The 7,430-square-foot house has five bedrooms, four-and-a-half baths, a wine cellar and a fountain in the yard.

"Restored to its 1909 charm, this early modern exudes elegance and grandeur from every room," according to the listing with Coldwell Banker Bain.

— Melissa Allison

Machinists strike has ripple effects at Spirit plants

After renewed talks between Boeing and the striking Machinists union quickly ran aground this past week, major supplier Spirit AeroSystems in Wichita, Kan., warned its 10,000 employees that their already-shortened workweek may be further cut.

Spirit President and CEO Jeff Turner wrote in a memo that options, "in the worst case, include the possibility of broad shutdowns and temporary layoffs, possibly as early as November," The Wichita Eagle reported. "Hopefully, this alternative can be avoided."

Spirit put most employees on a three-day work schedule after the Boeing strike began Sept. 6. The company's work includes building fuselages for Boeing 737s and the nose-and-cockpit sections for the 787.

Wichita also is home to about 700 striking Machinists at Boeing facilities there.

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A shutdown of Spirit's facilities would have a "dismal" ripple effect on Wichita's economy, especially if it runs into the holiday season, Wichita State University professor John Wong told The Eagle.

Banks cautious about federal help

Bankers, like many businesspeople, tend to be suspicious when they hear, "We're from the government and we're here to help."

So local bank executives are taking a cautious approach to the federal capital-infusion plan that Treasury Secretary Henry Paulson unveiled last Monday with an offer-you-can't-refuse session for the nation's nine biggest banks.

"This appears to have come together so quickly — the way the top nine organizations were basically required to take the capital — there are just a lot of questions about the rationale" says Melanie Dressel, president and CEO of Columbia Bank in Tacoma.

"It's something that I think just about all banks are considering," she adds. "Overall I think it's a good plan."

Glenn Deutsch, president and CEO of Prime Pacific Bank in Lynnwood, says that "if it doesn't carry a stigma and the cost is what they say it is, I would be for it."

Paulson no doubt gave the top banks little choice in order to lift the cloud of neediness from the program. Still, one banker told USA Today there's a worry that smaller institutions taking the money will be seen as "the weak sister ... the wounded antelope."

The Treasury's infusions, limited to no more than 3 percent of a bank's risk-weighted assets, will buy preferred stock that pays the government 5 percent interest during the first five years.

That would be "cheap capital" for smaller banks that might want to bolster their short-term capital at a time when "no one is buying bank stock," says Deutsch, who is also vice chairman of Community Bankers of Washington.

But he says regulators still have to answer a lot of questions: "It's so new that when I called, they were still getting the details."

For taxpayers and the economy, the question will be whether banks that get an infusion retain it to bolster their capital position, or turn around and deploy that money in new lending.

— Rami Grunbaum

Comments? Send them to Rami Grunbaum: rgrunbaum@-

seattletimes.com or 206-464-8541

Copyright © 2008 The Seattle Times Company

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