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Hey Contractor...
I know of you from the Wamuq board, so I thought i'd ask you... I came across this one the other day, and am considering picking some up tomorrow...But just curious, as to whether there was a good reason why it tanked so badly??? Or was it for no good reason other than everything tanked in Oct/Nov???
Thanx in advance...
ATWO
Just for the record...
That wasn't me that wrote it, I was just moved by it, and thought you guys would appreciate it...
Happy New Year to all of you on this board, and I hope that we will see some justice regarding this situation one of these days...I don't think I could have held this long without the wisdom and DD many of you have provided...
Thanx alot,
ATWO
Excellent Yahoo Post...
We really need someone to be held accountable...
GOLDMAN SACHS UPGRADED WM TO HOLD BEFORE FDIC WIPEOUT 7 minutes ago Goldman Sachs upgraded WM to hold knowing all of this was going on. Serious misrepresentation of the facts. The story told to the public was that Goldman was supposed to be brokering a sale. This at the expense of average Americans. Sure there are a lot of institutions that owned shares in WAMU, but there are an incredible amount of average Americans who had large portions of their retirements tied up in WAMU stock. Without that upgrade, many may not have kept the stock through this trouble. Some are now threatening suicide. Families are breaking up. People have lost everything. How can the American public not be safe investing in an American Bank. A bank that owns assets, that had a large deposit base and that stated it could sustain life until 2010.
That doesn't even begin to mention that by next week the whole dynamics of WM could change for the better with the government bailout coming. Stock could have increased in value once the toxic paper was taken from WM. More liquidity would have been available. The 2010 deadline would be extended to many more years once the toxic paper was removed. This was not a bank in trouble in any of the standards that have been repeated over the last eighty years.
You really want to get upset about it, take a look at the aftermarket trading volume. Before any of this was announced, there were three very large trades in the early aftermarket, in a three minute period totaling almost 13 million shares. The FDIC and the markets allowed someone to get inside and make away with some 12 million dollars. nasdaq screenshot There is no way that trading should not have been suspended before this was allowed to happen, just another case of corruption and manipulation by the government and large institutions.
Possibly the most damaging could be what this could do to the American psyche as a whole. The corruption in the system has just killed the morale and spirit of many people. They have no trust in Wall Street, the financial system, politics and the future of America! Corruption, short selling, manipulation of stock, and abusive ratings downgrades are all responsible for bringing this company down to the point that this could happen, and then a corrupt government agency cherry picked a bargain for their buddies at JPMorgan who get a huge upside. The FDIC facilitated a transaction that was so corrupt and damaging words cannot properly describe it.
In the end, it is the system as a whole that will lose, as the average American can no longer trust not only it's banking industry, or Wall Street, but apparently it's government anymore.
John F. Bovenzi, Chief Operating Officer, FDIC on The Role of Deposit Insurance in Financial Crises: Past and Present; at the International Association of Deposit Insurers (IADI) 7th Annual Conference; Arlington, VA
October 29, 2008
(1) Closing Weekend
I'll start with the closing process.
The most difficult part of a bank closing for the FDIC is separating insured from uninsured deposits in a timely manner. "Timely" generally means over a weekend. That was the case at IndyMac. Seventy people worked around the clock so the new bank could open early Monday. It was a monumental effort.
(4) Cost
Let me now turn to cost issues.
IndyMac will turn out to be the most expensive bank closing in the FDIC's history.
It could cost the FDIC $9 billion.
Virtually all of IndyMac's assets are connected to the housing market, mostly residential mortgage loans and mortgage-backed securities.
The loans are predominately in the markets that have suffered the greatest loss in housing values, California, Nevada and Florida.
Most of the loans have little or no documentation, including no verification of income.
Many were interest-only or payment option adjustable rate mortgages.
Most were designed to be refinanced after housing prices continued to appreciate.
All of these characteristics make it easy to see why the bank's losses would be high.
But while the bank's asset quality may determine the amount of loss, it is the liability side of the balance sheet tells us who absorbs those losses.
Virtually all of the bank's nondeposit liabilities were secured borrowings.
Secured lenders don't lose any money if they have adequate collateral. Since all of IndyMac's other borrowings were deposits, the FDIC and the uninsured depositors will absorb all of the losses.
Contrast that situation with the closing of Washington Mutual Bank.
There were no losses to the FDIC in that closing, despite the fact that the bank had assets that were similar to those at IndyMac.
However, on the liability side of Washington Mutual's balance sheet were $15 billion in senior and subordinated notes. That represents as much as $15 billion in cost that would have been absorbed by the FDIC had Washington Mutual's liability structure looked like IndyMac's.
This dramatic difference in cost to the FDIC between the two banks resulted in the FDIC modifying its risk-based premium structure to impose higher costs on those insured institutions that have a large portion of their liabilities secured and reducing the costs imposed on those banks that have a large portion of their liabilities unsecured and subordinate to depositors
Conclusion
In conclusion, conservatorships and bridge banks are important tools available to the FDIC to handle bank failures.
Our experience with IndyMac only strengthens that belief in this process for resolving failed banks.
But subsequent events, which no one really anticipated, have shown the value in the government having broad and flexible powers.
Every subsequent development since the failure of IndyMac Bank has been unique.
And this...
At Washington Mutual, a closed bank sale was arranged transferring $300 billion assets, at no cost to the FDIC, without protecting creditors, other than depositors.
At Wachovia, an over $800 billion bank, an open bank transaction was arranged with Citigroup that would have resulted in no expected cost to FDIC. The FDIC used its systemic risk exception to facilitate this transaction. Subsequently, Wells Fargo arranged a purchase of Wachovia without government help.
The FDIC now temporarily guarantees non-interest bearing accounts and some of the debt of banks, thrifts and their holding companies
http://www.fdic.gov/news/news/speeches/c...
From the Yahoo board...
WASHINGTON, Dec 30 (Reuters) - The controversial accounting rule used to value hard-to-price assets underlying the U.S. housing crisis was not a major factor in 2008 bank failures, the U.S. Securities and Exchange Commission told Congress in a report on Tuesday.
However, the report also recommended that regulators issue more guidance to help banks determine the fair value of an asset such as mortgage-backed securities when there is little or no market trading.
Fair-value, or mark-to-market, accounting requires banks to determine the market values of their assets each quarter and report them to investors.
Critics such as publisher Steve Forbes and some business lobbying groups have blamed the accounting rule for billions of dollars in write-downs by U.S. banks and a downward spiral that triggered margin and regulatory capital calls. Defenders of the rule say it gives investors needed information about the risks faced by a bank.
The SEC report was ordered by Congress in October when it approved an unprecedented $700 billion bailout for American financial services companies. Lawmakers asked the SEC to study the fair-value accounting rule's impact on banks' balance sheets and to assess alternatives.
The new study, prepared by SEC staff accountants and lawyers, found the accounting rule "did not appear to play a meaningful role" in 2008 bank failures. So far, 25 U.S. banks have failed this year, up from just 3 bank failures in 2007.
"Rather, bank failures in the U.S. appeared to be the result of growing probable credit losses, concerns about asset quality, and, in certain cases, eroding lender and investor confidence," the report said. "For the failed banks that did recognize sizable fair value losses, it does not appear that the reporting of these losses was the reason the bank failed."
Washington Mutual, the biggest bank to fail this year, had less than 5 percent of its assets accounted for at fair value on a recurring basis through income, the report said. JPMorgan Chase & Co bought WaMu's banking business on Sept. 25 for $1.9 billion when the government closed the thrift. WaMu's holding company later filed for bankruptcy protection.
The SEC report endorsed the view of investor and accounting groups which say fair-value accounting lets investors see what is truly on banks' balance sheets.
The report made eight recommendations to improve the accounting standard, such as standardizing the treatment of impaired assets and issuing more guidance on how to determine when markets become inactive.
Under the current accounting rule, assets in an active market can be valued based on a simple price quote. But in an illiquid market, the value is derived from management's best estimate and computer models.
An asset is considered impaired when there is a sudden decline in its value. Depending on the type of asset or financial instrument, those impairments can be written off.
The SEC study recommended more guidance to help company accountants decide when to use observable market information and when they should supplement it with computer models. Accounting guidance is typically prepared by accounting rulemaker Financial Accounting Standards Board and then approved by the SEC.
The report was posted on the SEC's web site at http://www.sec.gov/news/studies/2008/mar...
http://www.guardian.co.uk/business/feeda...
Because some people were hoping there would be assets well in excess of the liabilities stated on the A/L...And I tend to think there are...I don't think there will be a major sell off on Monday...I think the scumbag MM's will hold it in place as usual, maybe let it fluxuate .005 or so to give the appearance that there is some legitimate trading going on...But this fact, as well as Diamonds point that there are big dogs in this heavily, and imho most importantly the fact that the media is not allowed to mention Wamu, tells me that this thing is bigger than some of us can imagine...Oh, and cantseemtopickem, please keep bashing...For some reason this elevates my confidence that this thing is gonna fly one of these days, and yer gonna be hating yourself...This because you "can't seem to pick 'em"...
ATWO
Well maybe yer right, but I was just thinking how intelligent it would have been to have kept seperate the banking business, from the real estate in which the banks operated...Considering that the banks were most likely always the most vulnerable in a seizure situation...However one could argue that they didn't consider themselves vulnerable to begin with, which of course has been proven wrong by the powers that be...
"Where exactly are we???"
Anybody know where that quote comes from??? C'mon metal heads, that's a pretty obscure one...
ATWO
Well, I guess that depends on how hard the Germans want to hit that ask...
ATWO
O.K., I understand that, but...
Do we know for a fact that the property where the banks operated were owned by WMB, or is it possible that they were owned by WMI and leased back to the bank...Or maybe in some cases the former, and some the latter???
Hey Jestiron, I kinda been thinking the same thing...
And I believe that 300B+ number has alot to do with bank assets, and total customer deposits...But what I have been wondering, and maybe someone can clarify this for me, when the banks were seized, did the fire sale include the real estate that the banks operated in???
I know many of the branches operated in strip malls which were most likely leased, unless Wamu owned the buildings and leased to themselves...And that's how I would typically see them here in IL, but I would also guess that there were some wholly owned freestanders out there where Wamu was a more prominant force as well...
Now, it would make sense to me that the holding co. might own the RE, and lease to the banks...In which case, we should have some really well financed new tenants occupying those spaces...But if they were set up to where the banks owned the RE in which they operated, then I guess they would now be JPM's RE...
But this perplexes me, because imho, seizing and selling a business operation is one thing, but including the real estate in which the business operates should be quite another...And if those freestanders and/or office buildings were in fact owned by the holding co., and leased to the banks, then I would imagine there is much more worth to this company than what is stated in the A/L...
Sorry if the answer to this is well known already, and maybe I missed it...But if someone can clarify, I would greatly appreciate it...
Thanx, ATWO
Ya know, I was thinking CIT just this morning...I agree that this might be an excellent match...Hmm...
Did you mean .029???
I like Washington Fartual
Over 100k traded before the bell....
Hmmmmmm????
Delisting question???
Hey guys, just to be certain, that news blurb about delisting WAMUQ says it will be removed from the OTC bulletin board effective Dec 24...I just want someone to clarify for me that this not an issue...
Thanx,
ATWO
Ask just moved up to .05 on Scottrade :)
Hey Guys, been watching the board for months, but until now I felt I had not had anything constructive to add...But I now have to ask a question...Does anyone else have blanks accross the board for wamu on their streaming quotes??? Anyone???