Thursday, September 25, 2008
Largest US thrift seized
Posted by Kevin Allman on Thu, Sep 25, 2008 at 11:56 PM
JPMorgan to Acquire Washington Mutual's Deposits
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....Complicating the sale process is what to do with the thrift's $227 billion book of real estate loans, more than half of which consists of home equity loans, option adjustable-rate mortgages, and subprime mortgages.
It was not immediately clear how much of WaMu's troubled loans might be eligible for Washington's $700 billion financial industry bailout program.
WaMu has a significant presence in California and Florida, two of the states hardest hit by the nation's housing crisis. But its 2,239-branch network could appeal to many lenders looking to expand in retail banking, especially in the western United States and the New York City area.
The L.A. Times has more:
JPMorgan has scheduled a conference call with investors and analysts for 6:15 p.m. PDT....The arrangement is expected to assure that the Federal Deposit Insurance Corp. won't have to take a hit on WaMu's insured deposits. A failure of WaMu, without a deal, would have been by far the biggest bank collapse in FDIC history.
WaMu, based in Seattle, is huge on the West Coast; in California, Oregon, and Washington, this will be big bad news. Some talking head on CNBC just described it as "dispatching one of the walking dead with a minimum of bother."
I wish I understood more about this. And I wish I trusted the people who tell us about it.
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US Thrift simply means a bank that holds deposits for individuals, as opposed to a bank that is purely a commercial bank. Don't even ask how I know this.
Current Events by "Passing For Normal" The Presidential debate will go on tonight - in the event that John McCain misses his plane to Oxford due to the need for his presence to explain derivatives and chaos theory to some members of Congress, he will be sending Sally Field as his substitute. Except for Tina Fey, the SNL Palin dead-ringer (who had previous commitments), Sally bears the greatest resemblance to Sarah Palin, who cannot attend since she will be monitoring the skies over Alaska tonight to catch a peek of Putin. It is as yet undecided whether Sally will wear the red Palin VP nominee suit, a tacky Hillary pantsuit knock-off, or perhaps be more appropriately attired as either the Flying Nun or Gidget, for this auspicious event. The Chancellor of the University of Mississippi expressed extreme gratitude that the program would go on, and that Sally would be well compensated in WaMu Bucks, obtained just yesterday from Washington Mutual before the Feds took away their keys to the vault. WaMu Bucks were modeled after, and structured to behave like, those cuddly credit-default swaps so loved by Lehman Bros. Sally was unavailable for comment on the recent outrageously bad behavior of said credit-default swaps but had earlier expressed confidence that, "if the WaMu Bucks were good enough for Obama and Jim Lehrer, well, they would certainly do the trick for her".
