Well that was very apparent when they were left to fail and have JPMorgan come in and purchase the nation former largest deposit taking institution. I actually go into the conference for JPMorgan when they announced this to their shareholders. I have never and I mean never heard a more excited group of males, puts Super Bowl celebrations to shame.
They knew they got the deal of a century. They were going over the numbers and they basically said no matter what the losses were from all their lending assets, it was a once in a lifetime opportunity.
You would think that the deposit institutions would be the banks we would bailout but it was not the case. In is my feeling as well that because they didn’t have a direct line to the Fed or U.S. Treasury is why they were left to have WaMu’s financial position deteriorate to the point where they only got cents on the dollar for the largest base of deposits in the country. Yes, they made bad choices like doing refinances and home equity lines of credit on inflated homes, but all banks did this but we decided to pick winners and losers and the winners seem to be the same old “boy club”.
Bloomberg - Kerry Killinger, the former chief executive officer of Washington Mutual Inc., said his company became the largest bank failure in U.S. history in part because it was excluded from a group of financial institutions favored by U.S. policy makers.
Washington Mutual wasn’t protected from short sellers and the U.S. Treasury Department excluded the company from information sessions it held with competitors, Killinger said today in testimony for the Senate Permanent Subcommittee on Investigations. Other former Washington Mutual executives at the hearing and subcommittee chairman Senator Carl Levin, a Michigan Democrat, blamed Killinger for ineffective management controls and lax lending standards.
Interesting how an accounting change can give so much benefit to a bank that had a bundle of bad loans on its books. I would like to know more about the loan that are in question and if they figure they will become or stay current in the future or if this is using the losses to offset tax liabilities?
I was on the conference call with JP when they announce the Washington Mutual acquisition and what I can tell you is that they were very very happy when announcing the deal. They talked about how low they paid for WaMu’s “good” assets and now matter how they looked at this purchase, it would be very beneficial to JP Morgan Chase in the future and you know what, I believe it.
JPMorgan Chase & Co. stands to reap a $29 billion windfall thanks to an accounting rule that lets the second-biggest U.S. bank transform bad loans it purchased from Washington Mutual Inc. into income.
Well this is a lost for Seattle, I personally have a couple friends that I am trying to reach to see what their fate is. You know what they say, “s&%t closest too home, hits you the hardest”.
JPMorgan Chase said it will eliminate 3,400 jobs at Washington Mutual’s banking operations in Seattle.
Of that total, 1,500 jobs are being eliminated now, with those employees to be gone by the end of January. Another 1,900 employees will stay on in temporary, transition jobs that will disappear next year.
Now it looks like its time to seek protection from their creditors. I feel very bad for anyone who put money in this company during the last 6 months. It is sad they could not get the capital they need to weather the storm.
Washington Mutual may file for bankruptcy shortly, said Merrill Lynch analyst Kenneth Bruce terminating coverage of the stock.
The top U.S. savings and loan bank, whose market value has been virtually wiped out because of soaring mortgage losses, was closed by regulators on Thursday, and its banking assets were sold to JPMorgan Chase & Co or $1.9 billion.
The company witnessed $16.7 billion in deposit outflows from September 15 to September 24, according to an Office of Thrift Supervision statement.
“We suspect the series of ratings downgrades and concerns over the position of U.S. financial institutions, in particular Washington Mutual, led to the deposits outflow,” Bruce said.
Shares of Washington Mutual sank 90 percent to 16 cents in morning trade Thursday.
Well this has been rumored for some days now and it has now been completed. With their deposits 3 times the FDIC’s balance sheet, this was something that was going to happen. CNBC said a majority of there loan books contained home equity lines of credit, home equity loans, option adjustable-rate mortgages, and subprime mortgages. This does not look good for the existing operations after this purchase with the country going into a recession. It will put pressure on the borrowers to keep up with their obligations.
JPMorgan Chase will acquire the deposits of Washington Mutual, CNBC has learned. The deal is expected to be announced during a Thursday night conference call at 9:15 p.m. ET(1-877-238-4671 (U.S. and Canada) / 1-719-785-5594 (International) – access code: 814030 or via live audio webcast at www.jpmorganchase.com). This deal will mark the end of independence for what once was the largest U.S. thrift.
Federal regulators have been heavily involved in putting together the transaction, which comes as WaMu is besieged by a huge number of bad mortgage loans on its books.
The exact details of the deal aren’t known as yet, but JPMorgan is expected to acquire WaMu’s deposits and branches, as well as other operations. The deal isn’t expected to expected to result in any hit to the bank-insurance fund.