What would have happened had the bailout passed prior to the seizure of WaMu’s assets? Would the government have spent billions buying the garbage on WaMu’s balance sheet that JP Morgan just wrote down $30 billion?
Possibly…but depositors were already starting move cash out, so it’s unlikely WM could have been salvaged.
Seems to me that this bailout would be throwing good money after bad. We should just let the insolvent banks fail in an orderly process under our existing laws.
Does anyone think it somewhat strange that the FDIC took WAMU over in the middle of the week, rather than over the weekend as is normally done? Is it just a coincidence that this occurred while lawmakers are desperately trying to pass a massive bailout bill? It seems to be right in line with Bush’s Iraq 2003-style financial scaremongering the other night.
deposits were moving, but not as fast as they could have…WM had a little more time i think and well, congrats, they just killed the common
I think the AP should have used some better words in their article this morning, look at this paragraph from that article: One positive is that the sale of WaMu’s assets to JPMorgan Chase prevents the thrift’s collapse from depleting the FDIC’s insurance fund. But that detail is likely to give only marginal solace to Americans facing tighter lending and watching their stock portfolios plunge in the wake of the nation’s most momentous financial crisis since the Great Depression. So, you’re telling me, that if JPM did not buy WaMu, and another bank failed soon after, FDIC wouldn’t be able to cover insurance payments??? I bet there’ll be a lot of scared people when they read that article…
I was scared before that
There were a number of other banks lined up, though. In fact I know the Banco Santander delegation was quite keen on WaMu.
JP Morgan buys WAMU for $1.9B Wamu’s current Market Cap: 278M What am I missing?
Ohh, you guys and gals!!! Please we need the Bailout. I was wrong. This news article below paints the sad picture why we need a bailout. Stop bitchi*g and contribute to the bail out. Poor guy. New CEO Fishman could exit WaMu with $11.6M Mr. Fishman appears set to collect a payout worth $11.62 million if he leaves the company “with cause” or because of “constructive termination." With J.P. Morgan’s takeover of Washington Mutual, it’s unclear what role Alan Fishman—who was hired only 18 days ago as WaMu’s new CEO—will play in the combined company. But if Mr. Fishman leaves the thrift, it’s pretty clear that he would be well-compensated for his short stint on the job. Mr. Fishman appears set to collect a payout worth $11.62 million if he leaves the company “with cause” or because of “constructive termination,” according to a copy of his employment agreement, which was disclosed un a regulatory filing on Sept. 11. The agreement calls for Mr. Fishman to earn 2.5 times his base salary of $1 million, or $2.5 million, plus another payment that is 2.5 times his annual bonus. He has earned no bonus in his brief tenure, but the agreement states that if Mr. Fishman is terminated in 2008 or 2009, he should receive 2.5 times 365% of his annual salary, which would add up to $9.12 million. This $11.62 million, of course, would be in addition to the $7.5 million signing bonus he was awarded when he joined WaMu earlier this month. Derek Aney, a WaMu spokesman, was not immediately available to discuss Mr. Fishman’s new role in the merged company or whether Mr. Fishman will be eligible to retain all of these payouts. David Schmidt, a senior consultant at compensation firm James F. Reda, noted that AIG’s former CEO Robert Willumstad rejected his $22 million severance package earlier this week after the firm was bailed out by the government. Mr. Schmidt said he wouldn’t be surprised if Mr. Fishman forfeited some or all of his compensation if he doesn’t join J.P. Morgan. “It’s entirely possible,” he said. “That’s a significant payment for an incredibly short period of time on the job.”