Washington – JP Morgan To Acquire Deposits Of Washington Mutual

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Washington – JPMorgan Chase & Co. became the biggest U.S. bank by deposits, acquiring Washington Mutual Inc.’s branch network for $1.9 billion after the thrift was seized in the largest U.S. bank failure in history.

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Customers of WaMu withdrew $16.7 billion from accounts since Sept. 16, leaving the Seattle-based bank “unsound,” the Office of Thrift Supervision said late yesterday. WaMu’s branches will open today and depositors will have full access to all their accounts, Sheila Bair, chairman of the Federal Deposit Insurance Corp., said on a conference call.

WaMu is the latest casualty of a financial crisis that drove Lehman Brothers Holdings Inc. and IndyMac Bancorp out of business and led to the hastily arranged rescues of Merrill Lynch & Co. and Bear Stearns Cos., which was itself absorbed by JPMorgan. WaMu in March rejected a takeover offer from JPMorgan Chief Executive Officer Jamie Dimon that the savings and loan valued at $4 a share.

“This is a fabulous franchise,” Dimon, 52, said in an interview. “We think we got this at a price that protects us, where if we were wrong, it still protects us.”

WaMu collapsed as its credit rating was slashed to junk and its stock price tumbled. Facing $19 billion of losses on soured mortgage loans, the lender put itself up for sale last week. WaMu fired CEO Kerry Killinger on Sept. 8 and replaced him with Alan Fishman, who was awarded a $7.5 million signing bonus and $1 million salary.


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FinancialGuru
FinancialGuru
15 years ago

As time goes on ther will only be one bank. There was a time when there were many banks then the system started to consolidate where mergers and accquisitions started happening throughout the banking system. Then expansion with many new names coming on the scene. The way to reestablish confidence in the banking system is to keep them open for one hour per week. During that hour every one that received gifts from banks should bring back these gifts as a sign of goodwill. These gifts should be displayed and be available for all depositors to use. So you can use my blender while I use your old decrepit and farstinken toaster. Eventually everyone will feel like one big family. Bank robery will virtually be eliminated. What gonnif will have time to eat and drink and enjoy the delicious foodand then dofka go and hold up the place. Se loint zuch nisht. The gonnif will be forced to go to a nearby appliance and try to rob the place. But our cops will just sit there and arrest anyone that has crumbs on his lips and seems to be a gonnif. So this is a sure way to help the banking system in a non political way while feeding our gidollim aka Big Fressers. I want to make a prediction, that the candidate that adopts my plan will in no time be in the White House and then of course he will immediately race over to his favorite bank and begin to fress in a non partisan way . You know with very short grepses and a tremendous outpouring of gas. Shoin.

in english
in english
15 years ago

what does this mean for my WaMu checking accounts? Or my WaMu mortgage?

Anonymous
Anonymous
15 years ago

There will only be one Bank, one oil company and one airline and that it is why you should never vote Republican they only care about themselfs. There has never being in history more large corporations mergers then under Bush’s term.

shver
shver
15 years ago

If you hold money in this bank, it may (very likely) have been forfeited. Check with your attorney.

anonymous
anonymous
15 years ago

WOO HOO!

Former Mortgage Guy
Former Mortgage Guy
15 years ago

I can tell you without a doubt that, WAMU’s undoing is a direct result of their Sub-Prime Long Beach Mortgage division.

Not that I did many of them, But, I saw on their product sheets how they had Loan Programs available for some of the worst possible borrowers. People you wouldn’t trust to re-pay a $50 loan let alone Hundreds of Thousands of Dollars. Give people with horrible credit histories a loan, don’t verify income & then wonder “How come they’re not making their Mortgage Payment?”

I guess it’s not “Better at the Beach.”

Anonymous
Anonymous
15 years ago

#4 why would you say that and start a panic? Do you want to cause someone to have a heart attack R”L. Your money is safe and insured up to $100,000 or $200,000 per joint account. Business is as usual in the bank today and for most people, the changeover will be seamless.

Oy Gevald
Oy Gevald
15 years ago

The end of the article states: “WaMu fired CEO Kerry Killinger on Sept. 8 and replaced him with Alan Fishman, who was awarded a $7.5 million signing bonus and $1 million salary”. WOW, a bankrupt company has $8 Million Dollars to give away without proving himself yet!!! Put that into perspective.

Anonymous
Anonymous
15 years ago

Actually, he is getting $11 million in severance pay. Not bad for working (at Wamu) only three weeks.

Anonymous
Anonymous
15 years ago

The real criminals are the government officials who offered JP Morgan the accounts of WaMu for only 1.9 billion.
A couple of months ago (see the AP report) JPMorgan offered WaMu over 5 billion to buy EVERYTHING (the accounts and also the bad debts). WaMu turned it down, since it was a laughable offer.

Now, the government tells JP Morgan that they can pay less than half what they originally offered – and they also can take just the “good” assets of the company and not the bad debts???
WaMu has more than 300billion in assets (again, look up their corporate profile, and the disclosures on the sale) ! Who would allow someone to buy their retail accounts for a tenth of what they are worth?

And to prove the point – the shares of JPMorgan shot up today, as the market realized how much money JPMorgan just swindled for themselves.

Wachovia is a very sick bank as well (and also much smaller, with fewer branches and fewer account holders) – and last week it was trading for $40billion… How on earth would the US Treasury ask JPMorgan to pay 5% of that to own the entire retail operation of the country’s largest thrift bank !

I can only imagine CEO Jaime Diamon’s reaction when this was offered to him – he must have thought it was a practical joke !