27 September 2008
Republican bailout plan
Posted by schirristreet under: Uncategorized .
WaMu thunderclap in economic storm
by Frank James
It wasn’t a surprise that Washington Mutual, better known as WaMu, failed. For months It’s been the thrift institution equivalent of a dead-man walking, finally being put to death by a run by its depositors, making it the largest bank failure in U.S. history.
Still, the timing of its demise, coming when it did at the very time Congress and the White House were trying to reach agreement on a Wall Street bailout, was like a thunder clap coming from the economic storm clouds hanging over the nation’s capital.
Meanwhile, J.P. Morgan Chase was one of the few financial companies left standing with a strong enough balance sheet to do such a deal.
One of the best parts of the deal is it won’t eat into Federal Deposit Insurance Corp. funds, which, if as many banks fail as is expected, will likely have to be replenished.
The Wall Street Journal does its typically comprehensive job of covering the story giving a lot a space to what the deal means for JP Morgan Chase. (In a nutshell, it should be very good for the Wall Street firm, permitting it, among other things, to expand into two markets it’s lusted after — California and Florida.)
An interesting bit of color from the story is this: The WaMu chief executive, only in the role 16 days, was in New York as he tried to find a buyer for the thrift institution and was on his way back to the West Coast when the Office of Thrift Supervision took his company over. He had no idea.
Here’s an excerpt: WaMu, founded in 1889, became a national mortgage- and consumer-lending giant via a string of mergers in the 1990s led by Chief Executive Officer Kerry Killinger. But Mr. Killinger made several missteps. He pursued an aggressive retail expansion levitra kaufen marred by poor locations in too many markets. He steered WaMu into subprime mortgages, only to discover too late that the thrift was lending to many unqualified borrowers.
Treasury Relents on Key Points - WSJ.com
… government resisted the urge to bail out the markets, and nothing terrible ensued. … Vote: What do you think of the bailout plan? …
This year the company laid off employees, closed mortgage centers and cut its dividend.
cbs2chicago.com - Barack Obama, John McCain Meet With President George …
A Republican revolt stalled urgent efforts to lash together a national economic rescue plan Thursday, a chaotic … administration’s plan to bail out tottering …
But it still posted a $3.3 billion second-quarter loss and said it expected to lose $19 billion on its mortgage portfolio over the next two and a half years. WaMu’s biggest predicament was that it held large amounts of mortgages made in U.S. regions where housing prices have fallen sharply, such as California. WaMu has $53 billion in option adjustable-rate mortgages, a type of loan particularly vulnerable to default, as well as $16.1 billion in loans made to subprime borrowers.
The board, responding to investor discontent, stripped Mr. Killinger of his chairman’s title and then ousted him Sept. 7, installing Brooklyn banker Alan Fishman in his place. Messrs. Killinger and Fishman couldn’t be reached for comment Thursday night. Short Tenure
Upon taking WaMu’s helm, Mr. Fishman, who had run Independence Community Bank in Brooklyn, N.Y., before selling it to Sovereign Bancorp Inc. in 2005, declared his intention to keep WaMu independent. As rumors swirled about the company’s financial troubles, he tried to reassure investors and depositors by releasing more details about the company’s financial health.
But Mr. Fishman seemed to realize that WaMu’s problems were intractable. Last week, he asked Goldman Sachs Group Inc. investment bankers, hired by WaMu earlier in the year as it sought additional capital, to put the thrift up for sale.
www.kansascity.com 09/23/2008 Stronger oversight needed for bailout …
The Bush administration botched its proposed financial bailout plan so badly that it failed to satisfy even many Republican leaders, let alone the Democrats. extra …
In a year in which a number of financial-services CEOs have had remarkably short tenures — notably Merrill Lynch’s John Thain and AIG’s Robert Willumstad — Mr. Fishman stands out. While it’s not clear what role, if any, he will play following the J.P. Morgan transaction, he has been on the job for a mere 16 days.
FOXNews.com - Bush Meets With Presidential Candidates, Lawmakers on …
Bush Meets With Presidential Candidates, Lawmakers on Bailout Plan, Bush expresses hope that negotiators can reach an agreement soon on a financial bailout.
WaMu’s deal team, including Mr. Fishman, left New York on Thursday night and caught a plane back to Seattle, not knowing that the company was about to be taken over by the OTS and sold to J.P. Morgan.
Related posts: Bermuda festival, Misty may treanor wikipedia, Hunger levels soar in East Africa, Famous love letters, ‘Berlusconi bill’ passed in Italy
Leave a Reply
You must be logged in to post a comment.