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Holy Shit Sandwiches: WaMu taken over by FDIC; deposits sold to JP MorganUser Forum Topic
Submitted by davelj on September 25, 2008 - 4:41pm
This is a weird one. On a Thursday? The FDIC must have been very worried about a bank run to force this transaction down WaMu's throat on a Thursday. Apparently WaMu's executives were not warned about this. The FDIC is saying this won't result in a loss for the insurance fund. This is technically correct if JP Morgan is taking over all the deposits and paid a premium for the whole shebang (which is likely). But it's highly likely that there will be net losses to the owner of the (crappy) assets (the govt. - us) because the loss on the assets will likely be larger than the premium gained on the deposit sale to JP Morgan. So, in reality - eliminating the double-speak - this is another de facto bank seizure/closure where the taxpayers will take a big hit. The fact that the "FDIC Insurance Fund" isn't the accounting entity that will take the hit is not much consolation. Obviously, details to follow. Good times!
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The new division of JP Morgan holding the deposits will be called "P-mU"
UPDATE:
It looks as though JP Morgan is taking on all the assets of WaMu as well (Yay for taxpayers!!) and the "mark" to the assets will come out of the hides of everyone below the depositors on the balance sheet. That means common equity, preferred, sub-debt, etc. all goes to ZERO. Ouchtown: Population Texas Pacific Group and Others!! David Bonderman phone home!!
OK, I feel better about this.
No if the bailout bill passes those marks will likely somehow be deferred to the Taxpayer. JP Morgan is not the kind of firm to take on a financial nuke. Remember the Bear Stearns deal?
Found on CNBC:
FDIC Seizes Wamu
Ha ha my CD there matures this Saturday... I wonder if I will have access to the money any time soon. Luckily it's under $100k.
Where are the "wamu will never fall" posters today?
So this is some kind of government preemptive strike? This way WAMU does not declare bankruptcy? Right?
Crisis averted, nothing to see folks, go on back home and turn on your t.v.s.
working at the FDIC must start to resemble playing 'Missile Command'.
I must admit that it irritates me a bit that WaMu won't show up on the List of Failed Banks because, technically, it doesn't look as if any depositor money will be lost. But when common, preferred, and debt holders (I must assume that the FHLB will get paid) get bupkus, well, that's a failure in my book.
it is in the list of failed banks...
http://www.fdic.gov/bank/individual/fail...
What's odd is that some sort of deal must have gone through days ago. My wife sent someone a check through WaMu online bill pay about a week ago. They told us that they received a hard paper check today, dated Sept. 19, with JP Morgan's logo on it. No mention of WaMu anywhere. September 19! I remember once Bill Maher said he doesn't believe conspiracy theories because they assume that people are smart and can keep secrets. I used to agree. Obviously something happened behind closed doors a week ago and is being hidden from the public. Does anyone else find this alarming?
http://www.fdic.gov/bank/individual/fail...
Outstanding! Normally the FDIC adds the failed institution to the list simultaneous with the announcement, which they didn't do this time around, so I thought maybe they weren't going to add it to the list. I'm much happier now.
Do you have scan of the check?
"Do you have scan of the check?"
Sadly, no. The online bank does not publish a scan, and the recipient deposited it today before the "takeover" made news, not realizing that it was evidence worth xeroxing. This feels like a UFO sighting, "Oh crap, I couldn't quite get a picture of it in time." But my friend who received the check is reliable. I believe they saw what they saw.
HAHAHAHAHA!
Will JPMorgan keep the wamu name? They aren't under FDIC so they don't have to use the federal in their name.
Sadly, no. The online bank does not publish a scan, and the recipient deposited it today before the "takeover" made news, not realizing that it was evidence worth xeroxing. This feels like a UFO sighting, "Oh crap, I couldn't quite get a picture of it in time." But my friend who received the check is reliable. I believe they saw what they saw.
Did you experience missing time as well
:rofl:
"Did you experience missing time as well"
Kind of. I feel like the past 8 years are lost. Does that count?
Kind of. I feel like the past 8 years are lost. Does that count?
If you read the ufo thread that may seem funnier.
Yes, the past 8 years do feel a bit like something was stolen. However, I feel we got just what we needed in this administration to help wake up the mass consciousness.
It would be incredible foolish if they did with confidence in WaMu the way it is...the name is actually really deterimental.
The funny thing is that with this acquisition Moodys has promptly downgraded JP Morgan! LOL!
Pulled money out of the ATM late last night. No problem and no mention on the ATM or on-line about the takeover.
Pretty sure we all expected this, but on a Thursday!?!
Karl Denninger had a video up questioning whether or not the Fed would try to force WAMU under this weekend in order to spur politicians into action (see capeman's "Fed forcing big bank down this week" thread -- "Look!! WAMU is going under because you're not moving fast enough on the taxpayer giveaway to Wall Street!!! Hurry fast, don't ask any more questions!!"
IMHO, he could very well be right, and the choice of a Thursday makes it look even more sinister because they want Congres to act before the weekend. (re-adjusting tin-foil hat now)
This is the first official, explicit "Holy Shit" of the Holy Shit Phase (9/08 - 2/09). Was supposed to be San Diego housing, but I'll take it.
Here's the Q&A from JPM about Wamu, for those of us holding accounts there:
http://www.chase.com/welcomewamu/