myturnsoon, "What if they just sell the assets...?"
It's really complicated!
There is an obvious trend afoot here. WaMu is 4th is a series of high-profile institutions to "fail" (by regulation). In each prior case the company had weeks, if not months, to sell off assets to raise cash and avert the problem. But none of them did anything like that. They just continued to be in denial and pander to the public with statements that there was no problem, FOR THEM. Until it was too late. The Fed is the cause of this, and NOT the insolvancy of these institutions.
In each case, the Fed regulators stepped in and took over, and sold assets. They had this stupid "Mark to Market" rule that gave them the right to do that. And in each case they also confiscated "the books". And now the courts are involved. And the many lawyers are just loving this. After the Fed makes its initial move I doubt any more assets will be sold until the dust clears, many months from now. This is turning into a gigantic political scandle and swindle, and WaMu is just one victim.
From the most recent press release it sounds like there is official acknowledgement that the $5B on deposit at the former WaMu bank, now JPM bank, does IN FACT, belong to WaMu Holdings. And THAT is a direct benefit to we shareholders. From my viewpoint that was the most important issue for us.
The $5B is safe where it is for now, in a bank. But WaMu is pushing for actual re-possession of the money; a withdrawal. So what would WaMu do with it if they got it back? Put it into ANOTHER bank. Or maybe start another bank to put it into. I don't think they really NEED the money right now for any specific operational purpose.
It looks to me like WaMu is trying to get the money back in order to do some real physical damage to JPMorgan. And rightfully so. From my viewpoint there is some real heavy duty "hanky panky" going on behind the scenes; corruption at a very high level involving the Federal Government. It looks like there are going to be at least two major law suits filed against JPMorgan. This is going to turn into a magnificent "soap opera" that will be entertaining for a long while. But I don't think it will affect OUR SITUATION much going forward.
Now that WaMu's ownership of the $5B seems to be settled, What's left to be done? WaMu needs to get their records back so they can determine the value of what they still own. THAT will translate directly into a valuation for each share of WaMu stock. That is what we, as shareholders, want to know. Right? I think the $2+ estimate is in the ball park.
As far as the BK goes, that could be discharged at any time at the discretion of WaMu, whenever they feel they no longer need the Ch11 protection. The BK was voluntary to start with and can end quickly with the filing of one court document.
As far as we know, WaMu's assets exceed their debts by several multiples. So paying off their creditors is really not a big issue. We just don't know the financial details. As the info becomes available the stock price will be adjusted, higher and quickly. That is, barring any unforseen bad circumstances developing.
The damage has already been done to WaMu. I really don't anticipate any more bad news. But I do see a lot of bad news forth coming for JPMorgan. From what I understand, the Wall Street "smart money" is gobbling up these WaMu shares and buying PUTS on JPMorgan that has a relatively high PPS right now.
I am not sure if that arbitrary restriction against shorting the 500 financial institutions has been recinded. But when it is removed- watch out! I have heard that there are another thousand banks across American that can be put into failure mode by the Fed. The question is, will they do it?
For WaMu shareholders, we are "ready to launch and the countdown has begun".
All just my opinion...
bbd
