Given recent events, any bets that JPM/WaMu get together this week?
My model says 20% chance.
wamu is dead, but less of a financial impact from BS - FDIC will step in to get wamu’s deposits to be covered by another bank. not a fed issue here - just fdic
There is a limit in the US established by the Fed preventing banks from having more that a certain % of total DDA. I think it is like 10-15%. But C, JPM, and BAC all are above it which means they can not acquire another bank thus raising their control over a total % of deposits. It is to prevent a run on the US banking system by the fialing of 1 bank. Banks are only allowed to grow their deposit base organically after they have reached this threshold. So I don’t think Wamu can be bought by any of the big 3. The other probem is that I don’t think Wachovia, Suntrust, Wells Fargo, or any other super regional is in the position to buy them. I think it is more likely that Wamu is taken over by the FDIC.
I think there was some rumor that the Fed may relax that limit so that a takeover would be possible. Probably in one of the countless bloomberg articles I read on Friday…
ymmt Wrote: ------------------------------------------------------- > I think there was some rumor that the Fed may > relax that limit so that a takeover would be > possible. Probably in one of the countless > bloomberg articles I read on Friday… Yeah, I could see them doing that but that could be a mistake…The whole purpose was to prevent a run on the bank…Who knows how stable any of the acquiring banks would be post deal and that puts the whole system in even greater danager.
why do you think BOFA and JPM want to get big, real big, real quick, right about now? even if it means larding on bad stuff with the good stuff that federal rescue, who do you think is going to get it, if the grim reaper comes calling?
i am hearing WB is next. WM is not heating up my berry tonight
None of them for now…one head has already been sacrificed.