WAMU BONDS ARE THE PERFECT HEDGE FOR COMMON STOCK OTHERWISE YOU ARE CHOOSING TO GAMBLE (I Own Junior bonds, common and pref)
This is an excerpt from an article written January 7th 2010 entitled
Too Big to fail by DAVID G.TARR of New Economic School, Moscow
When Washington Mutual was placed in FDIC receivership on September 25 2008, it was 6-7 times larger than any bank that had failed in US history. It had $310 billion in assets and $182 billion in deposits. The previous largest bank failure was Continental Illinois National Bank and Trust with $41 billion in assets and $30 billion in deposits, when it failed in 1984. Despite its size, what followed was a fairly standard FDIC procedure under receivership.
The FDIC wiped out the stockholders and most of the unsecured bondholders—then without bondholder liabilities, sold the bank's assets along with the customer liabilities to J.P. Morgan Chase for $1.9 billion, and handed those proceeds over as partial recovery for the senior bondholders.
Customer deposits at Washington Mutual became liabilities of J.P. Morgan Chase and on the next day after being placed in receivership (Friday September 26, 2008) customers were able to continue banking as usual at the combined facilities of Washington Mutual and J.P. Morgan Chase. This was all done so quickly and efficiently that it has hardly even been noticed—the Senior Financial Supervisors Group investigating the credit events of late 2008 ignored it. It should be clear that there was little or no negative impact on broader
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Please do not overlook the fact that the FDIC has already alloted the 1.9 Billion to the senior bondholders (according to this info)
If this is the case WAMU SENIOR Bondholders will be paid FIRST, JUNIOR BONDHOLDERS NEXT etc.
On October 13, 2009 in the DC action the Judge granted the Bondholders motion to intervene.
This is the equivalent of the equity committee being appointed for stockholders
Junior Bonds are selling for 1.00 for $1000 in Face value
1)IF the Junior bonds are paid in full this is 1000 Times the money
2).50 Cents on the dollar is 500 Times the Money
3).25 Cents on the dollar is 250 Times the Money
4).[b]125 Cents on the dollar is 125 Times the Money
IT IS CRAZY NOT TO HEDGE COMMON STOCK PURCHASES WITH JUNIOR BONDS I own the following junior bonds
CUSIP 93933VAS7
CUSIP 93933WAB2
CUSIP 93933WAA4
CUSIP 93933WAB2
The bondholders have INCREDIBLE power, ONLY owning common stock is crazy, if you REALLY beleive their will be money left for common stock ( I think so) buying the Junior bonds makes perfect sense.
Trust me I have been a consultant in a LOT of bankruptcy cases and BONDHOLDERS have priority and have a much better chance of seeing FULL recovery.
The WAMU Bondholders have FIRST Claim to the assets even in front of the holding company.
IF WMI inc had 1st priority the FDIC would have turned over the 1.9 Billion that JPM paid to WMI, NOT TO THE SENIOR BONDHOLDERS.
I am 100% sure a settlement will be reached I'm not sure when BUT lets all be aware of the incredible deal on the junior bonds, if you beleive COMMONS will get paid ANYTHING buy Junior bonds as a hedge.
DRED SCOTT
