FDIC TO SEIZE WAMU AND SELL ASSETS TO JP MORGAN [Brokered by government]

CNBC | 7-25-8 | Lawrence Kudlow CNBC

[Petronski]

Just heard live.

JP Morgan investor call tonight 9:30

[BurbankKarl]

all of it?

WSJ The U.S. government has brokered a deal for J.P. Morgan to acquire the deposits and some branches of Washington Mutual, according to people familiar with the matter. The deal won’t impact the FDIC insurance fund.

[johniegrad]

Here’s a good one. This week I got a credit card application from WAMU and an invitation to subscribe to the New York Times.

[CougarGA7]

I love Irony.

[Petronski]

JP Morgan acquiring deposits, some branches of WaMu.

Government brokered deal.

[Petronski]

Not all of it, just deposits.

Please change headline to JP MORGAN BUYS DEPOSITS OF WAMU [Brokered by government]

[Nervous Tick]

How can this possibly be? The markets are all stove up, there is zero liquidity in the system, the bailout has stalled, and we’re doomed. Doomed!

I heard on good authority from a FReeper on another thread that the market will be down a THOUSAND points tomorrow!

:-)

[Petronski]

JP Morgan up 10% on deal.

WaMu down 12%.

[devere]

JPM got 29 billion of government money to buy Bear. I wonder how much they were bribed to buy WaMu?

[Petronski]

Since they’re buying just the assets (my headline needs repair), there’s no word yet on where the liabilities went.

[LibertyRocks]

Does anyone know if this includes any of WAMU’s mortgage “branches” or whatever the proper word would be?

[dynachrome]

“no word yet on where the liabilities went’

Check your tax burden a year from now.

[Truthsearcher]

Chapter 11?

[Petronski]

Details are sketchy. All that is known right now is that “some WAMU branches” are included.

[nanetteclaret]

AIG is still running television commercials, as of last night.

[TomGuy]

JP Morgan acquiring deposits, some branches of WaMu.

Government brokered deal.

What has been happening with the failed banks is similar:

Another financial institution gets the deposits at cents on the dollar, while the FED (aka, taxpayers) eventually get the liabilities.

It will be interesting to see if we find out what price JPM paid for those WaMu deposits, and what those deposits are worth.

[CougarGA7]

How can this possibly be? The markets are all stove up, there is zero liquidity in the system, the bailout has stalled, and we’re doomed. Doomed!

I heard on good authority from a FReeper on another thread that the market will be down a THOUSAND points tomorrow!

:-)

WHAT!!! Darnnit that means my ping was almost too late!
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"Are We Dead Yet?" Ping List

If you want on or off the "are we dead yet" ping list please freepmail me.

Warning. This is a very low volume ping list. No responsibility is implied if the ping is too late.

NOW WITH A THEME SONG!!

Man! That was close.

[bereanway]

JPM and Goldman are pretty much the government. Before this is all over they’ll own most of the retail and investment banking industries.

[Enchante]

re: liabilities

maybe the deal’s contingent upon the federal govt. buying up all the liabilities....

[ken21]

now that morgan’s not a renegade financial institution,

but a bank,

they need some offices.

california has a lot of wamu’s.

si.

[LiveFreeOrDie2001]

President Bush:

*** “THIS SUCKER COULD GO DOWN” ***

[LibertyRocks]

OK, thank you. (I’d be very happy if they - or really ANY other company - does. Not going to hold my breath though!)

[WalterSkinner]

..Morgan wanted to do this for a while. I’m interested in more details. My family has some good reasons to be concerned with what happens to WAMU...

[Brilliant]

In other words, the Feds have taken over WAMU. But that’s not the impression you get from the caption. Must have been in tough shape if they did not even wait until Fri night to do it.

[CougarGA7]

The real JP Morgan bailed the US out back in the day at the government’s request. Wonder what effect JP Morgan buying up WaMu’s assets will have on the overall situation.

Of course someone still have to eat the liabilities.

[jsh3180]

From the stories on Dow Jones Newswire, it sounds like JPM is skimming the cream and leaving the illiquid junk for the government. Says they are buying the “bulk of the operations”.
WM closed at $1.69, when I started watching it 5 minutes ago it was over $2, but straight back down to $1.70 now. 450 million shares traded today.

[Nachoman]

Another financial institution gets the deposits at cents on the dollar, while the FED (aka, taxpayers) eventually get the liabilities.

Yeah, but the FED holds on to the liabilities until the market rebounds, at which point they become assets, and make money for the taxpayers. I know this is true because the gov't said so.

[C19fan]

The whole question is what about WAMUs toxic mortgage portfolio especially the pay option ARMs. Did the Fed provide a backstop if these assets go further into the tank?

Wonder why the Feds want to broker a deal?

“WaMu ended August with $143 billion in retail deposits — roughly triple the size of the entire Federal Deposit Insurance Corp fund that backs customer deposits. It has also said it expects to end the quarter with a “well-capitalized” status well in excess of federal minimums.”

[Petronski]

From the stories on Dow Jones Newswire, it sounds like JPM is skimming the cream and leaving the illiquid junk for the government.

That's how it smells.

[TomGuy]

I know this is true because the gov't said so.

And that is the same gov that told us a couple of weeks ago that the economy was basically sound? And now they are needing $700 Billion or $1.2 Trillion just to keep it afloat.

[Petronski]

Did the Fed provide a backstop if these assets go further into the tank? Wonder why the Feds want to broker a deal?

It's not known yet, but I'll make a wild-ass guess: the Fed is going to continue to do piecemeal what the Paulson plan was supposed to do en masse.

[Nervous Tick]

>> NOW WITH A THEME SONG!!

I like it! Very upbeat and energetic. It kinda makes one feel good about one’s impending doom.

Please do put me on the “are we dead yet?” ping list. Just in the unlikely event that we’re spared long enough to have another thread to ping.

[MissyMa]

Technically deposits are liabilities and loans are assets LOL! I wonder how much WAMU has in non-accruals?

[jhpigott]

That’s at least $125 billion that Paulson just spent without congressional approval.

[CougarGA7]

You got it.

[redgolum]

Please put me on the “Are we dead yet?” ping list.

If anyone needs me, I will be out back welding spikes on my dune buggy and making my bride dress up like Tina Turner’s character in “Mad Max, Beyond Thunderdome!”

In other words, Thursday night at the Golum household.

[Petronski]

There is no “official” title because I’m taking this from Larry Kudlow’s excellent broadcast tonight.

Admin Mod has graciously made an improvement for me.

[Proud_USA_Republican]

Appears about 20000+ wamu employees are out of job as of tonight. Looks like a firesale, not a merging of banking operations.

[dalereed]

“It has also said it expects to end the quarter with a “well-capitalized” status well in excess of federal minimums.””

They ended their 5% CD mdeal last Friday although they still have a 4% momey market account for new depositors of over $25k.

I would guess that they made their goal.

[Nervous Tick]

>> I will be out back welding spikes on my dune buggy

Watch that extra weight, there, “Max”. It really bloats your carbon footprint. Or do you think that just because we’re all doomed, YOU get to stop saving the planet?

[Attention Surplus Disorder]

“no word yet on where the liabilities went’

Check your tax burden a year from now.

Correct!

[Petronski]

It’s an FDIC seizure.

David Faber CNBC

[Petronski]

FDIC seizure

“Wamu guys don’t even know about this.”

[Petronski]

It’s an FDIC seizure.

[nina0113]

Since they’re buying just the assets (my headline needs repair), there’s no word yet on where the liabilities went.

"Privatize the gains, socialize the losses." They're saving the liabilities for the bailout.

[Truthsearcher]

This is why we need a deal to come out tonight, more banks might fail if something isn’t done.

[Petronski]

They're saving the liabilities for the bailout.

The Feds are going to do the bailout whether they get the Paulson plan or not.

And they should.

[sageb1]

Do you ever get the sense that you’re watching children relearn conflict resolution without the need for parental interference, but just the need for good role models to remind them how to behave?

[AndyJackson]

I got a credit card application from WAMU and an invitation to subscribe to the New York Times.

My head is exploding trying to think about the implications of this.

[JasonC]

Um, the deposits *are* the liabilities.

On the other hand, it is the assets that are volatile and have been losing value.

Many people get confused about that...