EXCERPT from Maria Cantwells inpromtu speech regarding the vote on the 'Bail Out'.
"..... I ask you to just think of one institution, in my State, Washington Mutual - which I would not necessarily applaud for its subprime lending rates or for its use and backing of credit default swaps, but I would ask you to consider the fact that as that institution was forced into sale by this Government.
Who were the winners and losers in that?
JPMorgan got the assets of that institution and benefited from that. In fact, JPMorgan predicted to me on a conference call the night they acquired Washington Mutual that after one year with their investment, they would have an over $500 million on that investment. That is a 27 percent returned in one year.
The FDIC got some money out of that, too. And then to say nothing about the over 60,000 shareholders who were wiped out. ........."
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EXCERPT -- Did the FDIC Sabotage WaMu's Management and Erode Investor Confidence?
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FDIC Chairwoman Sheila C. Bair, together with JPMorgan Chase (JPM) CEO Jamie Dimon shared the spotlight for saving Washington Mutual (WM) depositors without costing the government a dime. The story is old by now; JPM got the good and the bad of the bank without the holding company’s ugly debt. (Think Clint Eastwood.)
After the glory fades, the reality will come out that the FDIC cannot be trusted. JPM and others were conducting real negotiations with the FDIC at the same time they were conducting fake negotiations with WaMu’s management. During the consummation conference call, Jamie Dimon disclosed that JPM had unprecedented access to WaMu’s mortgage detail. JPM received computer tapes with the most granular mortgage detail (FICO scores, LTVs, and MSAs) to compare with their own data and develop loss projections. JPM had the time to do a true bottom up analysis.
I do not know if it is common FDIC practice to negotiate the sale of a to be closed bank without informing management. But in this case, it sabotaged WaMu’s effort to sell its valuable branch system. I also do not know when the FDIC undercut WaMu’s management. Was it before or after the fall of Lehman? WaMu started to face a bank run on September 15 – the day Lehman filed for Chapter 11.
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The entire article can be viewed at this url:
http://www.zimbio.com/pilot?ID=G5GMRw8AO5B&ZURL=/CEO+Jamie+Dimon/news&URL=http%3A%2F%2Fseekingalpha.com%2Farticle%2F97717-did-the-fdic-sabotage-wamu-s-management-and-erode-investor-confidence%3Fsource%3Dfeed
Click Here To read the complete article - truly a good read.
