Wamu bought out by JPMorgan Chase!!!

[armac]

corporate investigator for a financial institution.


Many institutions have not repriced their loan portfolios, and have not completed true risk assessments on their portfolios, this is key for ALLL. Then the ones that have repriced, have put those losses into side GLs and not recognized their losses, this is the situation that has hampered the true financial picture.

Now the facade is falling down, look on the FDIC website for failed banks, there have been about 7 failures since the Indymac fiasco, but you have not seen or heard about these smaller banks failing, this is the FDIC keeping things quiet.

With the failure of Fannie and Freddie many smaller regional banks that had investments in in Fannie or Freddie are now finding there liquidity is being squeezed, this could lead to a systemic failure of the smaller regional banks.

None of this presents a pretty picture, but I do not have an answer on how to fix this situation.

 

[hamato_yoshii]

2 things: As I heard it just a minute ago, while the gov. is seizing the assest & liabiblities from wamu, aren't they planning on redistributing them, rather than keeping them?

other thing, couldn't it be argued that the gov. was proactive? The way I heard it, they did what they were supposed to do, when the fear of absolute collapse was real, they stepped in and basically served as the insurance policy (fdic).

I am not real versed in this arena so forgive me if I'm oversimplifying, and having stuff fly over my head and not realizing it.

 

[armac]

2 things: As I heard it just a minute ago, while the gov. is seizing the assest & liabiblities from wamu, aren't they planning on redistributing them, rather than keeping them?

other thing, couldn't it be argued that the gov. was proactive? The way I heard it, they did what they were supposed to do, when the fear of absolute collapse was real, they stepped in and basically served as the insurance policy (fdic).

I am not real versed in this arena so forgive me if I'm oversimplifying, and having stuff fly over my head and not realizing it.

Governemnet seized then sold the institution, how can they be proactive if this situation has been 2 1/2 years in the making?

The FDIC has not paid out anything on WaMu, you really do not understand the siution at all.

 

[hamato_yoshii]

Governemnet seized then sold the institution, how can they be proactive if this situation has been 2 1/2 years in the making?

The FDIC has not paid out anything on WaMu, you really do not understand the siution at all.

But aren't companies who are backed by the FDIC rely on the gov. in case things like this happen? While this company had a failure, weren't they proactive in making sure that this area of the market didn't collapse by taking the assets and selling them to companies who can be trusted with them?

 

[hamato_yoshii]

http://finance.yahoo.com/tech-ticke...oney-Is-Safe?tickers=WM,JPM,XLF,WB,^DJI,^GSPC

Here is a link that is sort of what I'm talking about, and if you watch the vid, I believe the words the guy uses are "the government was on top of this..."

 

[jcardona1]

But aren't companies who are backed by the FDIC rely on the gov. in case things like this happen? While this company had a failure, weren't they proactive in making sure that this area of the market didn't collapse by taking the assets and selling them to companies who can be trusted with them?

The FDIC is there in case the institution completely fails and people lose their money. in that case, the FDIC will cover your deposits, up to the $100K limit. in this case, wamu was seized and then bought by JP, so there is no risk with the deposits. Now JPMorgan is backing up all of wamu's customers deposits.

If JPmorgan were to fail and people lost money, then the FDIC would kick in

 

[cassharper]

And a huge portfolio of subprime loans, the have obviously not "repriced" that portfolio or there is a major shortcoming in ther loan allowance account. Their liquidity was in such a mess that they were seized on a THURSDAY, never seen a bank seized on a Thursday, they normally do it on Friday. WAMU must have been on the brink of a complete collapse.


you sure a bout this "get rich quick scheme" now?

It was a joke, I understand what is going on. Obviously it's not a get rich quick scheme or else the government wouldn't have had to step in at all.

 

[hamato_yoshii]

The FDIC is there in case the institution completely fails and people lose their money. in that case, the FDIC will cover your deposits, up to the $100K limit. in this case, wamu was seized and then bought by JP, so there is no risk with the deposits. Now JPMorgan is backing up all of wamu's customers deposits.

If JPmorgan were to fail and people lost money, then the FDIC would kick in

Ok, I'm trying to understand how they worded it in that link though, seems like they basically said "FDIC to the rescue!".

 

[armac]

It was a joke, I understand what is going on. Obviously it's not a get rich quick scheme or else the government wouldn't have had to step in at all.

I felt positive you understood all the nuances of the deal

 

[hamato_yoshii]