Washington Mutual just sold their deposits to JPM Chase.  The stock is now 40 cents.
Interestly, they didnt hang around for the bailout plan.

If this short ban is lifted - Wachovia is next.  Though that may not happen.

FDIC - will they need to be bailed out.  I hope not.


The list continues to grow.
CFC, BSC, Indymac, LEH, AIG, FNM, FRE, Merrill, WM

FDIC - will they need to be bailed out.  I hope not.


Not yet.  No loss to FDIC.  No loss to insured depositors.  No loss to uninsured depositors.

http://commercial-archive.com/d138bfd7bb6f0663dcc71c6b82557c00/2006/mayjpgs/wamupen.jpg

"So, that ad campaign making fun of old white guys in suits thing?  Was it worth it?"
  -Jamie Dimon, CEO, J.P. Morgan, while grinning and chomping on a cigar :)

Either there was a run on the WM's deposits, or the junk on WaMu's books got revalued to fair market value (namely squat), or both.  Either way, WM was insufficiently capitalized to continue operating, whereupon the Feds seize it, and turn it over to JPM on the cheap.  JPM acquires the junk paper at a price of $0.01, so it's not like there are any new time bombs introduced into JPM's balance sheet.

Because it was turned over to JPM, FDIC doesn't have to pay a dime.  Depositors (even with deposits over $100K) protected by JPM's capital.  JPM, in exchange, gets to walk away with a decent retail franchise for a hair under $2B.  Which, for once this week, is how it's supposed to work.  If you have an account at WM, your ATM card will continue to work.  Your branch will open tomorrow.  Your checks won't bounce.  You can keep banking there as if nothing happened; for once, there's no need to panic.

The politics of this get interesting.  Typically this sort of thing gets done over the weekend.  Today, with Shelby(R) trying to save his political skin by blowing up the bailout deal (even to the extent of torpedoing his own party's candidate, who, if there's no deal, will either give Obama a 90-minute informercial, or will be exposed as a liar for saying he won't debate tomorrow night in the absence of a deal!), the arm-twisting had to happen on Thursday night.

Dow futures off 100-odd points already, Friday's gonna be a roller coaster.  +-500 point swings again, here we come.  No deal (or a deal of $150B instead of $700B) over the weekend, and Congress will have called Paulson's bluff as to whether or not the world ends next week. 

Run the numbers over and over again as many ways as you like, we're STILL screwed.  It's the end of an era, get used to it!
::)

The timing of WM is interesting.  It appears to be the sacrificial lamb for Paulson & Co to push the bailout.  Interesting that it couldnt wait a couple days.

Just like Lehman.  It was thrown to the wolves.  Then, miraculously Bank of America takes Merrill and the deal talks begin.  Timing is planned.

Last night was Bush
Tonight was the WM sacrifice
This weekend - the plan.

Yes - tomorrow will be NASTY!!!!!!!!!!    Thats the way it should be because making money in these times typically isnt easy (except maybe RIMM tonight, lol).  Tomorrow, big swings to shake out the weak people.  Hedgies having fun IMO. 

I'm glad WaMu joined the epic fail club. Perhaps now they'll stop sending me two credit card offers a week (I already have a WaMu card, with zero balance: loan sharks and pawn shops have better terms...)

Ant

  loan sharks and pawn shops have better terms..,


Hey, say what you will about la Cosa Nostra, at least the Mafia will still be in business next week.

Ah crap...  I use Wachovia.  Time to switch to Suntrust.

Hey, say what you will about la Cosa Nostra, at least the Mafia will still be in business next week.

Those boys in Washington make La Cosa Nostra look like mendicant friars!
:o

I'm glad WaMu joined the epic fail club. Perhaps now they'll stop sending me two credit card offers a week (I already have a WaMu card, with zero balance: loan sharks and pawn shops have better terms...)

Ant



The do that to me too!  I'm like, "WTF?  I already have a credit card!"

Does this mean I don't have to pay the balance on it now? :D

Run the numbers over and over again as many ways as you like, we're STILL screwed.  It's the end of an era, get used to it!
::)


I think the American economy is done. Makes me glad I don't have anything. But I feel sorry for all those people losing their life savings.
I would not want to be a kid starting out thier lives with a young family. Or an older person who has worked hard all thier lives to arttain the American dream just to see it vanish in thin air.
We need an economic and social revolution in this country.
And I'm afraid that is what is coming. Afraid for my kids and Grandkids.

It is ugly now and probably will get worse - even with the bailout - because nobody is buying homes, the dollar may weaken, and oil/gas may rise.

I fear for my/our generation (kids of baby-boomers) because we do NOT have penisons and will MAY NOT have Soclal Security.  To think that SUPOSSED retirement is 40 years away (70 years not 65 like now) is scary.  All we have are our 401k plans (and other investments). For those people who are not SAVVY enough to invest on their own.  It will be scary.

Hopefully something will be done in the future.  If not, there will be alot of 75-year olds dropping dead on the job because they can't afford retirement.

The do that to me too!  I'm like, "WTF?  I already have a credit card!"

Does this mean I don't have to pay the balance on it now? :D


FDIC is still around so your money is fine (up to $100,000 only) if there is a bank run.  Not to mention, JPM Chase took the deposits (at a bargain of only $1.9 billion) so they are your new bank.  Jamie Diamon gets all the good deals.

I guess Wells Fargo or Goldman Sachs should be in line for the next good deal.  Unless it is Citigroup - there are rumors about Citiigroup and Wachovia now.  LOL