WaMu

[notoc]

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Got any Washington Mutual stock? Sell it

Not got any Washington Mutual stock? Short it.

Now!

[lucy]

Last time I checked WAMU was losing about 20% today alone down in the 2.30 range or below....The bank has been on the brink for about a year. I watch WAMU because it was the bank that held our mortgage before we sold our house, and they saved us by releasing the lein in the nick of time, although it was actually on the books with Countryside or whatever the company was that WAMU bought several years ago.

Funny story. I managed to get the direct email address of their senior VP in charge of residential mortgage and wrote him a personal letter about our woes. Within two days we got the release. Bless their hearts.

[notoc]

WaMu lost another 10% plus in after hours trading tonight... I shorted it at $4.25 1st of the month.

[notoc]

Funny story. I managed to get the direct email address of their senior VP in charge of residential mortgage and wrote him a personal letter about our woes. Within two days we got the release. Bless their hearts.

Good for you. I wouldn't hold out much hope that others would have had a similar result if they've tried that over the past 12 months.

[lucy]

Good for you. I wouldn't hold out much hope that others would have had a similar result if they've tried that over the past 12 months.

I would like to say we saw the way the traffic was heading up ahead, but we were facing a bubble payment due which would have put us underwater ourselves....selling when we did even at the loss we took was a miracle. Sometimes, it is better to sell when one can than to hold on until there is no hope of recovery....in some ways, stocks and houses are like a huge poker game. Know when to hold, and know when to fold, so to speak.

I am more than happy not to have a mortgage right now....there is a freedom in being mobile.

[notoc]

....in some ways, stocks and houses are like a huge poker game. Know when to hold, and know when to fold, so to speak.

You are spot-on with that analogy. Especially when one is short stacked, throwing a losing hand is often far better than paying to see the turn and the river only to find all the aces have already been dealt, or burned.

[notoc]

WaMu puts itself up for sale

Report says Goldman started auction for nation's largest thrift several days ago

SAN FRANCISCO (MarketWatch) -- Washington Mutual, the nation's largest thrift, has put itself up for sale, the New York Times reported on Wednesday, citing unidentified people briefed on the matter.

Potential bidders that Goldman has talked to include Wells Fargo, J.P. Morgan Chase and HSBC.

The Wall Street Journal reported that Citigroup and Wells Fargo have expressed an interest in buying WaMu.

WaMu shares fell 13% to $2.01. The stock rallied 11% to $2.23 in after-hours trading.

[notoc]

WaMu goes under, sold to J.P. Morgan Chase

SAN FRANCISCO (MarketWatch) -- In the largest bank failure in U.S. history, Washington Mutual Inc. succumbed Thursday to the fallout from the subprime mortgage crisis, was seized by federal regulators and rapidly acquired by J.P. Morgan Chase for $1.9 billion.

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Shares of Washington Mutual plunged $1.24 to 45 cents in after-hours trading after news of a JPMorgan transaction surfaced.

[Pepsi]

JPMorgan seems to be making out good in this financial meltdown.   I'm just a computer guy but I used to work there in the private bank division before and just after the merger with Chase and before the subsequent merger with Bank One.   I work with them a lot now as they are a client of ours and I can tell you operationally they are the gold standards - a top notch bank.   No bank puts more effort into risk management.   It's interesting how they were less exposed to the subprime mess and are now in a position to take advantage of other banks not doing a better job measuring their risk.     

If anything I'm a long term investor but I would imagine it's a good time to buy some JPM.. up 7% yesterday.

[notoc]

If anything I'm a long term investor but I would imagine it's a good time to buy some JPM.. up 7% yesterday.

The signals agree with you... but, beware - the details of this next bail-out will determine just how much JPM will profit from this situation.

If JPM gets what it wants, a government backed guarantee that the taxpayer will underwrite all of the liabilities to which the likes of WaMu (and JPM's other aquisitions) had exposed themselves, then I would say 'hold' but be cautious with your money, there is a big difference between 'hold' and 'buy' - there is a very good reason why banks are not lending to each other at 6% overnight prefering to put 'their' money on deposit with central banks at less than 3%.

Not one financial institution has yet owned-up to its actual off-balance exposure to this house of cards. Everyone of them is lying, commiting fraud on existing and potential investors.

No one should trust a bank at the best of times... when the banks stop trusting even each other, then the writing is on the wall - the banks stopped trusting each other 5 years ago, but nobody bothered to tell the public.

[lucy]

There is a conflict of interest going on, to be sure. Especially if some of those "investors" who could be exposed are actually those voting on the bailout.

[lucy]

I don't understand something, well, a lot of things, actually...

But, if WAMU has assets of 307 billion, how could JP/Chase buy it for 1.9 billion or so....? If the stock was selling for what at the end--something like .20/share....how could the bank still show that much in assets???

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[lucy]

This does give JP Morgan/Chase assets already in place in commercial banking, though...so, since they are going to go commercial, they don't have to buy or build new facilities and have the mechanisms, management, etc. in place to do so with ease. Wow.

I would rather this happen than see WAMU fall completely and their staff and banking operations (customers) be totally at a loss.

I wonder if any other big banks are on the brink.

[notoc]

I wonder if any other big banks are on the brink.

All of them.