WaMu downed and coined, +500 dkp

[Derek Thunder]

Link here

Washington Mutual, the giant lender that came to symbolize the excesses of the mortgage boom, was seized by federal regulators on Thursday night, in what is by far the largest bank failure in American history.

Regulators simultaneously brokered an emergency sale of virtually all of Washington Mutual, the nation’s largest savings and loan to JPMorgan Chase for $1.9 billion, averting another potentially huge taxpayer bill for the rescue of a failing institution.

The move came as lawmakers reached a stalemate over the passage of a $700 billion bailout fund designed to help ailing banks, and removed one of America’s most troubled banks from the financial landscape.

Customers of Seattle-based WaMu, with $307 billion in assets, are unlikely to be affected, although shareholders and some bondholders will be wiped out. WaMu account holders are guaranteed by the Federal Deposit Insurance Corporation up to $100,000.

By taking on all of its troubled mortgages and credit card loans, JPMorgan will absorb at least $31 billion in losses that would normally have fallen to the F.D.I.C.

JPMorgan Chase, which acquired Bear Stearns only six months ago in another shotgun deal brokered by the government, is to take control Friday of all of WaMu’s deposits and bank branches, creating a nationwide retail franchise behemoth that rivals only Bank of America. But JP Morgan will also take on Washington Mutual’s big portfolio of troubled assets, and plans to shut down at least 10 percent of the combined company’s 5,400 branches in markets like New York and Chicago, where they compete. The bank also plans to raise an additional $8 billion by issuing common stock on Friday to pay for the deal.

Washington Mutual is by far the biggest bank failure in history, eclipsing the 1984 failure of Continental Illinois National Bank and Trust in Chicago, an event that presaged the savings and loan crisis. IndyMac, which was seized by regulators in July, was one tenth the size of WaMu.

[Dark Silver]

Wait......what does this mean for the credit card I have with them?

[SirNitram]

Wait......what does this mean for the credit card I have with them?

Probably that you'll soon have a new one with a JPMorgan logo with the same credit line.

[Dark Silver]

Ah well. Business as usual then.


Good good.

[rhoenix]

Yeah, that's what I was worried about, too.

Of course, I might transfer my money over to a local credit union too, just so I have less to worry about later.