Good morning from Seattle,
I just came back from a meeting this morning that included a former WAMU executive. The meeting wasn't really about WAMU directly, but he shared several stories from his experience at WAMU that I found quite interesting. He maintained a good attitude toward all involved, was a true professional.
In short I wanted to share here are a few items of interest(nothing new really, but thought some might appreciate):
1.) He doesn't believe there is a smoking gun
2.) He listed four reasons that WAMU failed
A.) They grew really quickly, and were in the process of consolidating many acquisitions.
B.) Mortgages were a significant part of their business, and they had begun doing sub-prime mortgages without developing a lot of experience in the sector at a bad time.
C.) Liquidity issues, $16B had been withdrawn in the week leading upto September 26th, 2008.
D.) Timing was bad, TARP still under debate in congress, and FDIC couldn't afford a bank failure of that magnitude at that juncture in time (even if it was only a 5% likelyhood).
3.) WAMU was working hard to align all of their internal operations, and was taking good care of their people and customers as they went.
4.) WAMU was very innovative as a retail banking opperation, and was certainly envied by many in the banking industry.
5.) This particular executive helped find most of the people in his department jobs after they were laid off by JPM.
6.) Mentioned that some "experts" expect upto 1,000 more bank failures during the next 12 months or so.
7.) He has been involved in several mergers previously (usually from the other side.) but this one was strange. He and his department actually found out at 4:30 on Thursday afternoon via outside sources, i.e. on-line searches, that JPM had acquired WAMU via seizure. Conference call with JD was at 6:30 that evening, Seattle time.
8.) He doesn't believe that the FDIC needed to Seize WAMU (though he understands why it did.)
And my biggest take away, supports what all of us on this board believe. When I mentioned that I was an investor in WAMU and felt like there was a signficant likelihood of a payout, his answer was, "if I felt like it was a bad investment, I would tell you." He can't say directly, because he is a good guy, but we're going to get paid. Let's hope it is soon, real soon.
Go WAMU!!!!!
