It’s official- JP Morgan has bought Wamu’s deposits and some of their branches in a government brokered deal. More details will be released tonight- the deal is still very vague…
Seems that with the bailout being pushed through JP Morgan felt confident enough to finalize the deal. It’ll be interesting to see how this plays out.
Nice steal by JPM. Get all the deposits, assets, and branches of WM and the equity holders are wiped out.
“and the equity holders are wiped out.” And the bondholders take a haircut. Oh wait, no, there is government involvement. Let me re-phrase, the new bondholders take a haircut.
what exactly does it mean to “buy deposits”. aren’t deposits a liability?
It’s a crazy world - the assets are worthless so we buy the liabilities. You will be telling your grandchildren.
JoeyDVivre Wrote: ------------------------------------------------------- > It’s a crazy world - the assets are worthless so > we buy the liabilities. You will be telling your > grandchildren. Right, but functionally - is there actually any cash going back & forth? JPMorgan will just assume the deposits of Wamu, and not receive any cash to cover them?
Details are still a little vague. Listen to the JPM conference call if you wanna know more. It starts in 1 minute… jpmorganchase.com -> investor relations
“New York, Sept. 25, 2008 – JPMorgan Chase & Co. (NYSE: JPM) tonight announced it has acquired all deposits, assets and certain liabilities of Washington Mutual’s banking operations from the Federal Deposit Insurance Corporation (FDIC), effective immediately. Excluded from the transaction are the senior unsecured debt, subordinated debt, and preferred stock of Washington Mutual’s banks. JPMorgan Chase will not be acquiring any assets or liabilities of the banks’ parent holding company (WM) or the holding company’s non-bank subsidiaries. As part of this transaction, JPMorgan Chase will make a payment of approximately $1.9 billion to the FDIC.” “We look forward to welcoming Washington Mutual’s employees to JPMorgan Chase and working with them as we build a great company together,” Dimon added. The guys working on the east coast are toast…
So are WM shareholders pretty much screwed?
and holding company bondholders. yup.
JoeyDVivre Wrote: ------------------------------------------------------- > It’s a crazy world - the assets are worthless so > we buy the liabilities. You will be telling your > grandchildren. good one
brianr Wrote: ------------------------------------------------------- > Seems that with the bailout being pushed through > JP Morgan felt confident enough to finalize the > deal. > > It’ll be interesting to see how this plays out. This had nothing to do with them being certain of the bailout. They didn’t take any risks on.
I’ll find out in the morning what’s up when I go in and try to make a withdrawal. I’ve had an acct with WAMU for several years. Luckily I took most of it out over the past few months.