NEWSFLASH: FDIC siezes Washington Mutual deposits and transfers to JP Morgan

CNBC is reporting

that the FDIC forced a sale of Washington Mutuals deposit accounts to JP Morgan Chase. No further detail has been released yet. Recently, Wamu's debt fell into junk status. Wamu had been looking for partners or acquirers for the entire operation, yet no one wanted to bite. The bank was one of those who was hardest hit by the mortgage meltdowns, resulting in the resignation of some of it's management.

The news comes as surprise, as Washington Mutual, despite the low grading of it's debt, was still considered relatively healthy. Perhaps something was happening that was not released to the public that the FDIC discovered. It had to be something grave to get JP Morgan Chase to move that fast on Wamu's deposits. According to analysts, the deposits were the only valuable thing in the dying bank. I think, now more than ever, their future is in real doubt.

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Holy Shit!

So much for putting itself on the auction block!

This is HUGE! Aren't they the biggest bank ever to fail?

Wow!

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This is really bizarre

I told you the story about how I was talking to a personal banker at Chase about a month back about how I would go to WaMu if I wanted to get a good CD rate, and they told me that I should question the financial soundness of any bank making the offers WaMu has. I wonder if what's happening is that what's been an open secret in the banking community is finally hitting the MSM.

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WaMu

They were heavily involved in subprime and this one isn't politically correct...but they also courted illegal immigrants....now phony ids, no verifiable income (I'll leave the legality out of this story) ....giving out 200k+ home loans and 30k limit credit cards isn't so wise.

I'm not so surprised by the guys at Chase....that said...

Bank of Internet as far as I know is perfectly solvent and there are many, many small banks who have been responsible who also offer some excellent rates, interest rates, services.

I have an account at WaMu and pulled out my money over 1 month ago. 10 days ago I spent all by $20 bucks via my ATM.

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I've been trying to diversify

I put some money into GM and Smurfit Stone and I'm riding out the storm right now. I expect that as soon as GM turns a profit (which I expect next year) the price will jump back up to at least $20/share. Same with Smurfit Stone, they've got a new cardboard rate come in on October 1st, and that's likely to boost profits, so I think that the stock's undervalued.

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VIX

is the measure of volatility. Might bet on that one for the short term. ;)

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