JPMorgan Buys Failed WaMu Assets for $1.9 Billion

JPMorgan Buys Failed WaMu Assets for $1.9 Billion

www.cnbc.com

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. 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 [JPM 43.46 2.96 (+7.31%) ] 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.

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Mod Edit - Headline: Please use the original story headline from your source.

[edit on 9/25/2008 by JacKatMtn]

Hmmm FDIC siezes WAMU and sells the assets at firesale prices to JP Morgan. I guess this gets rid of another walking dead. So whos next? Wachovia...Citi? This is kind of scary because now I feel JP Morgan is getting to big. They on the to big to fail list now? Is bank of America on that list also? I didnt see this posted anywhere so if it gets duplicated Im sorry just delete the thread.



www.cnbc.com
(visit the link for the full news article)

KABOOM!

Hey we all knew WaMu was the walking dead for a while now right? IMHO the timing of this is to put a sense of urgency on Congress to pass a bailout quickly. It's a day early for a bank failure right? They usually come on Friday evening.

Originally posted by jefwane
KABOOM!

Hey we all knew WaMu was the walking dead for a while now right? IMHO the timing of this is to put a sense of urgency on Congress to pass a bailout quickly. It's a day early for a bank failure right? They usually come on Friday evening.

Yup congress just bought them the bailout package. They will use fear and say WAMU down more to come. I personally dont think there is anymore. I think WAMU is the last shoe to drop. I think the timing on this is convenient. Taxpayers get ready to take it to the chin.

[edit on 25-9-2008 by mybigunit]

Could someone tell me what this would mean for someone who had a WaMu account?

Originally posted by Storm4555
Could someone tell me what this would mean for someone who had a WaMu account?

This means chances are when you go there tomorrow it wont get open. Youll have to file a claim with the FDIC to get your money. If you have over 100k in there then you get your 100k but anything over you lose.

This is just the beginning folks. WAMU has been walking dead for awhile now. last week in a briefing to the leaders of both houses of congress Bernanke told them that in 7 days the dominoes would start to fall. and those 7 days are up today!

What about credit card holders? Willl they have to pay their debts in full now? Or what?

WaMu had to get bought out. It is better than having them go under. Also, they won't close shop tomorrow. You won't have to file for FDIC stuff either.

When a company gets bought out like this, it will be a phase out process much like TD Bank from canada bought out Commerce Bancorp. The deal was completely March 31, 2008, and they will start to rebrand the banks toward the end of this year and into next year.

You don't lose your money, they just became JPMorgan now. You might want to move your account, thats a matter of personal preference. I can't see why you would want to though as JPMorgan is one of the strong banks we have in the market.

As I said last week, JPMorgan was the bank to invest in long term, and this just futher proves why.

I'd like to provide a different perspective.

I posted a new thread but it was just deleted and not moved by the mod, so I have to re type everything. Thanks.

Anyway, I'm an long time investor so I know my stuff.

Most people who invested in Wamu didn't believe the corrupt S&P ratings and Moody's ratings. We look at the financial statements of the company.

Now, Wamu's stock was shorted like crazy, but their deposits were safe. No runs on the banks. Their market cap shriveled to 1-2 billion, but their deposits were at 120 Billion.

There is no way they would have failed. And, they didn't.

Where are the BK papers?

There were NO RUNS ON THE BANK like INDYMAC.

WHY WAS IT TAKEN OVER and my shares sh*tted on?

JP Morgan got Bear Sterns, and now WM? For pennys on the dollar?

Wamu is the biggest depositor in the US with 120 something Billion in deposits....... THEY DIDN"T FAIL!!!! WHY WERE THEY STOLEN TO BE GIVEN TO JPM???????????????????

reply to post by Rizen


For starters half of their 227 billion dollars of real estate loans were equity loans and sub prime mortgages, the stuff that has become real risky.

If I remember correctly, didn't WaMu amass some 6.5 billion in losses? They expected to lose around another 19 billion by 2011, not to mention the amount of people who felt that was an underestimate?

The massive falling of their stocks, the sheer amount of money they had tied up in sour mortgages. I think it is pretty self explainatory why WaMu's failure was inevitable.

Originally posted by Rizen
I'd like to provide a different perspective.

I posted a new thread but it was just deleted and not moved by the mod, so I have to re type everything. Thanks.

Anyway, I'm an long time investor so I know my stuff.

Most people who invested in Wamu didn't believe the corrupt S&P ratings and Moody's ratings. We look at the financial statements of the company.

Now, Wamu's stock was shorted like crazy, but their deposits were safe. No runs on the banks. Their market cap shriveled to 1-2 billion, but their deposits were at 120 Billion.

There is no way they would have failed. And, they didn't.

Where are the BK papers?

There were NO RUNS ON THE BANK like INDYMAC.

WHY WAS IT TAKEN OVER and my shares sh*tted on?

JP Morgan got Bear Sterns, and now WM? For pennys on the dollar?

Wamu is the biggest depositor in the US with 120 something Billion in deposits....... THEY DIDN"T FAIL!!!! WHY WERE THEY STOLEN TO BE GIVEN TO JPM???????????????????

I'm sorry your post got moved. There are some overzealous armchair generals err I mean moderators here on ATS.. the "Mod Squad"

Anyway your observation raises an excellent question and I think the one word answer is:

Consolidation

Seems harmless enough, we know it never is.

Because with every action there is an AGENDA.

And that is what is scary. The consolidation of banking power gives those in control of banking power more power than any military or puppet ruler, president, prime minister, king or queen.

As is quoted many times by the Rothschild's :

“Whoever controls the volume of money in our country is absolute master of all industry and commerce…and when you realize that the entire system is very easily controlled, one way or another, by a few powerful men at the top, you will not have to be told how periods of inflation and depression originate.”

Heres the Thing about JPMorgan now they have bought up all this bad paper from WAMU and Bear Sterns for pennies on the dollar. they have grown larger in the process now they are a prime candidate For Failure. You can't buy up the an institution as large as WAMU and Bear Sterns with all there toxic assets and expect to stay afloat for very long in a market were you can't sell these toxic assets.

Lets face it the bailout plan is atleast going to be delayed until next week because of hold outs in the house. how long can JPMorgan hold these assets on their books before they strain JPMorgans bottom line?

the more i look at the events of just Sept. alone its starting to make perfect sense if you planned at take over of the Country and you are now inacting that place. Cause the collapse of a large bank shift its debt around to another bank. cause another bank to fail shift its debt to another bank. cause a 3rd bank the LARGEST S&L in the US now and shift its debt to the the first bank you shifted debt to and cause its collapse. Keep repeating the cycle until all that is left is the Fed RESERVE banks. That way after you make your play for control of the governmet you control which banks have the money and by default controll the money of the citizens. Change the money to a new form of currency and in a short amount of time you've over taken the governement and control the wealth of the country.

Look At all dictatorships there are no independant banks just the central bank and its branches.

Originally posted by grimreaper797
WaMu had to get bought out. It is better than having them go under. Also, they won't close shop tomorrow. You won't have to file for FDIC stuff either.

When a company gets bought out like this, it will be a phase out process much like TD Bank from canada bought out Commerce Bancorp. The deal was completely March 31, 2008, and they will start to rebrand the banks toward the end of this year and into next year.

You don't lose your money, they just became JPMorgan now. You might want to move your account, thats a matter of personal preference. I can't see why you would want to though as JPMorgan is one of the strong banks we have in the market.

As I said last week, JPMorgan was the bank to invest in long term, and this just futher proves why.

They werent bought out. the FDIC seized them. You know the same way they did IndyMac. Are they still open? If they are then I stand corrected. If IndyMac Closed down they Wamu will be closed until the transition is complete wouldnt they?

[edit on 25-9-2008 by mybigunit]

reply to post by mybigunit

Youll have to file a claim with the FDIC to get your money. If you have over 100k in there then you get your 100k but anything over you lose.

And doesn't the FDIC have 20 years to pay up? By that time I think the Dollar wil be long extinct.

reply to post by bknapple32


No you won't have to pay in full. you should get a notice telling you that JPmorgan/Chase has bought your account and give you details on how to make your monthly payments

reply to post by jackinthebox


i read somewhere the FDIC has up to 100 years to make good on the larger amounts of deposits i'll look for a source on that so until i find it consider it here say

reply to post by Mercenary2007


And is it not true that there are only five countries left in the world that do not have a Rothschild dominated central bank? Iran, North Korea (where is Kim?), Cuba, Libya, and Sudan.

Can anyone explain to me why WaMu didn't just wait the 3 or 4 days it will take for this bailout plan to go into effect and utilize it? After all isn't that what all of this garbage is about?

There is something very wrong here. Maybe the FBI needs to look at WaMU.

reply to post by Mercenary2007


Until of course this bill passes and JPmorgan gets to sell these newly acquired assets for a profit. They could also rework out the mortgages. Thats not out of the question. It is the banks choice to either work out the mortgages with the people who have them.

Tell me this. Say you bought something for 30,000 dollars, and you had taken a loan out for 20,000. The bank that took the loan out is now 20,000 in with you. They start to massively tank. They are forced into a firesale. They sell that 20,000 dollar debt for 5,000 dollars. 25 cents on the dollar.

The new bank that bought up your debt is not in for 20,000 with you, they are in for 5,000, a significantly less risk to them AND that means that they also can lower the costs. They could keep the costs ridiculously high but that would be very stupid of them since you can't pay that.

They rework out your mortgage to where they still make a profit (because how cheap they bought the assets for) and you make out with a deal. The whole reason these assets are high risk is because the people who took out the mortgages can't pay for them.

If the new bank buys you out for 25 cents on the dollar, they have significantly less risk on you. Hence why other company's LOVE firesales. They can make a huge gain on it if they play their cards right, which they usually do or they wouldn't have made it this far.

Its a win for JPmorgan clear and cut because they know what they are doing. These assets will go from good to bad because JPmorgan bought them cheap and can afford to do what WaMu couldn't, and thats drop the costs significantly for the person with the mortgage.

If they buy your mortgage for 25 cents on the dollars (5,000 dollars), and they total 10,000 at the end of the mortgage pay off, they made 5,000 dollars off your mortgage.

WaMu on the other hand, would have a 20,000 dollar mortgage, and 5,000 dollars would be a significantly less profit margin. They might not be able to afford to go that low. So they have to have higher rates than the new bank.

In short, a company that gets to buy assets at fire sale prices is a winner.