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A major fuel shortage in western north carolina has many stations there out of gas, and in some cities, only one or two stations at a time have supply.

In hard hit Hendersonville, there were lines Tuesday as far as the eye could see at some stations.

One driver, who drove by 8 empty stations told us, “It’s terrible, trying to make sure you have enough gas to make it work.”

At an Enmark on 176 in Hendersonville, one of the only local stations to get a Tuesday delivery of gas, drivers waited for two hours to pump; only to find the pump motor broke. Hundreds were turned away, not knowing where else to go.

Governor Easley’s office says they have been in contact with major oil suppliers, asking for immediate deliveries to western north carolina.

Officials say it could be weeks before the supply is back to normal. That’s because some refineries are still not working and it takes days just to start them up again.

Hendersonville Police, Henderson County Sheriffs deputies and the Highway Patrol had to send units to multiple gas stations for crowd control.

Getting the supply isn’t easy for the suppliers too. We spoke to a gas station owner in Tryon who says they have no idea when they’ll get gas and he says the supply is so low, the fuel trucks sometimes have to wait in line up to 6 hours to fill their tanker trucks.

The U.S. government closed Seattle-based Washington Mutual amid customer withdrawals of $16.7 billion since Sept. 15, the Office of Thrift Supervision said in a statement. WaMu had “insufficient liquidity” and was in an “unsound” condition, the OTS said.

WaMu’s fate played out as Congress tried to reach an accord that will ease the global credit crunch, which has already driven Lehman Brothers Holdings Inc. and IndyMac Bancorp out of business, and Bear Stearns Cos. and Merrill Lynch & Co. into hastily arranged rescues. WaMu in March rebuffed a takeover offer from JPMorgan that WaMu valued at $4 a share. In most bank seizures, little or nothing is left for shareholders.

“JPMorgan is getting a steal compared with what they were going to pay,” said Scott Adams, a pension and investment analyst at the American Federation of State, County and Municipal Employees in Oakland, California, which owns WaMu shares. “It’s very tragic.”

WaMu collapsed after its credit rating was slashed to junk and potential suitors passed on making a bid. Facing $19 billion of losses on soured mortgage loans, the lender put itself up for sale last week.

New York-based JPMorgan won’t acquire liabilities of the lender, including claims by shareholders and subordinated and senior debt holders, the Federal Deposit Insurance Corp. said.

JPMorgan Expands

JPMorgan said it is adding branches in California, Washington and Florida and will have 5,400 offices with about $900 billion in deposits, the most of any U.S. bank. The branches will carry the Chase brand and will be integrated by 2010, JPMorgan said. They will be open for business tomorrow as usual, the OTS said in its statement.

During testimony before the House Budget Committee, Peter R. Orszag — Congress’s top bookkeeper — said the bailout could expose the way companies are stowing toxic assets on their books, leading to greater problems.

“Ironically, the intervention could even trigger additional failures of large institutions, because some institutions may be carrying troubled assets on their books at inflated values,” Orszag said in his testimony. “Establishing clearer prices might reveal those institutions to be insolvent.”

In an interview later yesterday, Orszag explained using the following example: Suppose a company has Asset X, whose value is recorded on the books as $100. Because of the current economic decline, Asset X’s real value has dropped to $50. If the company takes part in the government bailout and sells Asset X for $50, the company has to report a $50 loss on its books. On a scale of millions of dollars, such write-downs could ruin a company.

“It’s not going to be Armageddon,” says Mark Vaughan, an economist and assistant vice president for banking supervision and regulation at the Federal Reserve Bank of Richmond, Virginia. “But it’s going to be bad.”

FDIC’s Secret List

The FDIC knows which banks are at risk; it has a watch list with 117 institutions. The agency won’t disclose their names because doing so could cause depositors to panic and pull out all of their funds.

It won’t take many more failures before the FDIC itself runs out of money. The agency had $45.2 billion in its coffers as of June 30, far short of the $200 billion Whalen says it will need to pay claims by the end of next year. The U.S. Treasury will almost certainly come to the rescue.

Regardless of who wins control of the White House and Congress in November, no politician is likely to vote in favor of leaving federally insured depositors out in the cold.

The Hong Kong newspaper cited unidentified industry sources as saying the instruction from the China Banking Regulatory Commission (CBRC) applied to interbank lending of all currencies to U.S. banks but not to banks from other countries.

“The decree appears to be Beijing’s first attempt to erect defences against the deepening U.S. financial meltdown after the mainland’s major lenders reported billions of U.S. dollars in exposure to the credit crisis,” the SCMP said.

The company notified the stores’ general managers at 2 p.m. today, the source said, who spoke anonymously because he was not authorized to speak.

High fuel prices, cancelled floorplanning from GMAC Financial Services, a reliance on trucks and SUVs, a soft national economy and struggles in local markets had troubled the company, which on Sept. 12 closed its store in Scottsdale, Ariz.

In the end, the company could not raise operating capital and could not finance its floorplan, the source said. Company officials have discussed closing the company since Friday, the source said.

The rumours were categorically denied by the bank’s management, which nevertheless had to extend business hours by 30 minutes to cope with the queues of anxious customers.

The Bank of East Asia (BEA), owned by one of Hong Kong’s wealthiest families, blamed “malicious rumours” that it said had been circulating in the market since Monday and questioned the bank’s financial stability.

The bank, Hong Kong’s third-largest lender, said it had asked police to investigate. The shares fell 11pc.

“The management of BEA hereby states in the strongest possible terms that such rumours have no basis in fact,” BEA said in an e-mailed statement. “The bank’s financial position is sound and stable.”

Hong Kong’s central bank said it would provide liquidity to Bank of East Asia if necessary and reiterated that the bank and the city’s banking system were sound.

“I can confirm categorically that these rumours are unfounded,” Joseph Yam, Chief Executive of the Hong Kong Monetary Authority, told reporters, referring to rumours about Bank of East Asia’s financial stability.

“The banking system of Hong Kong is very robust,” he added.

The BEA’s statement said the bank had assets of more than $50bn (£27bn) in June and its capital adequacy ratio was 14.6pc – a level it described as “well above the international required level”.

It said the bank’s total exposure to the collapsed US investment bank Lehman Brothers and American International Group, the world’s largest insurer that was bailed out last week, was HK$422.8m (£29m) and HK49.9m, respectively.

The assurance did little to calm the bank’s customers, however, who feared the bank might be another casualty of the global credit crunch and flocked to its 130 city branches to withdraw money.