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Time to get real What do I do with the structured approach by following the book word for word if it speaks of nothing and has been proven in time as well. You said it perfectly, our battle in LT is not for trump change and no doubt, evidence has been brought in to support that fact. Your keen observation about postponing a hearing on employee claims a year in advance is also supportive of how it ties in with P&A closure date. I think its time to wrap up and give back whats due. Thanks
Investorhub, I have always been very positive on WMIH along with LT. In fact, this is what I admire about Sussman/MW... to have brought about. But, with respect to WMIH, all I have said in the past and still do to this day is that one has to work towards it and is not given. It could be $2, $20,$100 that will depend on what they make of it. Releases cannot be based off of that as it is a moving target with no guarantee and KKR deal along with 2.5 yrs waiting time speaks of that. Another thing to keep in mind is that, it's value kicks in after the fact i.e. if and when we make profit, we get a write off on taxes. So, if a company is profitable then it is not because of NOLs. And, to have a profitable business is the crux of the issue. NOLs will only reflect a significant change in price of the stock thereafter.
I am not going to undercut my margins because I get to write off on taxes. WMIH gets to benefit from this through alliances where each one has an incentive to go through WMIH
Thanks Catz for this. Will always appreciate that, no matter what happens. I am not rich, so what you say does count. Will also ask you to remain open to views different from yours, just in case they are proven correct in time. Best Wishes Dee
I can bet that if TPS would have asked for 20% as against 5% difference in WMIH, MW would have agreed to this as well. There is a catch here. When you speak percentage wise, the amount seems big but what does it amount to in real terms.
.033498 WAMUQ reflects 25% .0200 of WAMUQ reflects 10%
MW would have gotten 20000 shares of WMIH as against 33000 shares had he agreed to 10% as against 25% in WMIH. Correlate that with the current stock price and tell me what did he get. Forget about MW, tell me what did TPS get from the conversion in WMIH.
I am really surprised that common sense still doesn't prevail and any other form of reasoning hasn't proved a damn thing so far. It’s been 2.5 years past the occurrence and we are yet not open to accepting the significance of 5% difference with respect to WMILT as against 5% difference in WMIH. If the 5% difference in WMIH meant all that, then, why did TPS not venture in. Why did they along with MW had to go and look for KKR who determined the benefit of all the NOLs on the face of it to be at $1.37. And, if that was the value placed by an outsider then how much did MW or TPS recover from this.
In fact, I will lead to saying that removal of cap was “The Goal” and not a side effect because the recovery was known to the few but the amount was unknown. And, if this is true then one could see the significance of the tradeoff. One can see the impact of the percentage on net return, assuming that the recovery amount is limited to just 100 million.
In support, my reply to Az is given below. To me, it makes every bit of sense, not sure about others
If Killinger was really smart which I think he is, then knowing fully well what’s coming through the MBS scam and its possible impact to WAMU, wouldn’t it be prudent to separate the wheat from the chaff. The warning and possible impact was known months earlier. Given the FDIC threat and possibility, what is it that I can do to save the most I can. Short answer, prepare for bankruptcy in advance and leave the trigger out to the future. If someone else causes it to happen i.e. FDIC seizure then nothing like it. Atleast, I don’t get the blame for it. I am well prepared and covered in all respects for the loss, did the best I can to save the most and have kept a separate diary for recovery purposes just in case its needed. You can have the system, my excel sheet will do just fine
With regards to WMI, here is one in support. Also BK, were you able to look at the case cited in defense where the judge Denise Cote did in fact reach a conclusion that JPM did actually assume liabilities on securitizations.
Sorry BK, I couldn’t get back to you earlier. I was in my dreams enjoying my moment a bit as long as it lasted. :) You seem to know in so much detail that it is hard for me to counter to the extent desired, simply because my understanding is limited. Instead, I propose that we gang up against you and ensure that if you don’t agree otherwise, force be applied on you. :) Thanks to Jestiron for coming to help and addressing a part of your concern, as I didn’t have a clue. Your humble acknowledgement speaks highly of you. Thanks
Regarding your post:
Given the above, how come JPMC is assuming liabilities and paying for them.
The following decision against JPMC is very important and sets a precedent in my opinion with respect to liabilities
Once again, thanks to all for appreciating what was written
Regarding Suicides:
"Also, this part makes me think about the 12+ JPM bankers and attorneys that have committed suicide or otherwise died in mysterious circumstances in the last year or so: "
I don't have a clue with respect to the number of suicides that happen every year in US. Maybe, we should look at the average no of suicides in US for the last 5 years, then separate them out based on the age group and sex. Dig down deeper on their educational background and profession, and then relate that to JPMC specific suicides. imo, you will be surprised with what you find out :)
Age Group: 30-55 Sex: Male Education: Master's degree Profession: Fin, Legal and IT
My La-La Land is not asking you to buy in, but only asking you to hear me out.
Everyone got something except my dear poor Rosen . I will be a fool to undermine him on his capability for my dislike for what he has done to us. Assuming Rosen is just not in for money only, but more so wants to be treated as a class apart among his alma mater; my take is that he has yet to make his kill. If that is not the case then he has all the more reason to go after others, (FDIC/GS…) for the same reason he was in before. Bottom-line, what I am trying to convey is this, that either way, this is far from over and Rosen is on it.
I base this on a number of assumptions that I will leave it to you to agree to disagree with reason.
Game plan from the very beginning was a two pronged strategy with zero dollars for equity and that was a goal Rosen was set out to achieve. Any digression would have led to implications for all and an understanding was reached among the SNHs to maintain the course. The two pronged strategy was Bankruptcy Exit with NOLs and Recovery through Litigation. The game plan had to be maintained without divulging the course of Recovery through Litigation. The reason for this was if 4billion Summary Judgment was made then WAMU’s insolvency was questionable. The fight would have been long drawn. The benefit would have gone to the equity, and all powerful Fed/FDIC/JPM/GS/SEC… would have used their power to draw this battle out, and bankruptcy exit wouldn’t have been possible within the stipulated time frame. It was in the interest of all parties including FDIC/JPM to follow the course outlined by Rosen as it was the easiest way out for them. If you notice, the whole fight was between equity and Rosen. FDIC/JPM hardly had any involvement. The endgame for SNHs was to claim billions through Litigation and utilize NOLs for future. This end result was the same for them as long as equity was kept out and it was the simplest way to get all parties to agree to and the quickest and cheapest way out. Unfortunately, because they got caught in IT they basically got Fu….ed for their own wrong doing and they have no recourse but to live with it.
Everything was done to give away assets without regard to value in consideration, as Rosen knew the recourse was available through FDIC. Notice how there is no list of assets, WMB Stock abandonment, Visa/Boli-Coli policies…, all are done to insure equity is kept out.
Assuming everything was done in good faith to contain the situation in 2008 crises, the move was not to enrich JPM but to stabilize the financial system. As a result, an open ended P&A was drafted to make it happen with an understanding that modification would have to be made to even out the playing field for all banks and settle the score for any liabilities that may be assumed.
My take is Rosen has yet to settle this score and we have no knowledge of this because prior to any such disclosure, claims have to be settled and paid.
FDIC/JPM are fully aware that they are on the hook. The game is played together and not alone. When JD says that “We got a lot of money from Wamu”, all it points out to is that expectations are being settled. A claim will be made to FDIC which would indirectly be paid by JPM. This is already settled unofficially and would be presented officially through a claim once Rosen gets other claims settled and paid. Or it might be that FDIC has already retained a check as a condition of settlement which the parties are already aware of.
Without undermining the potential of WMIH and NOLs, this is more convincing to me as meaningful recovery, where Sussman/MW played there part to our best interest by making us part of both the Litigation Trust and the Reorg WMIH.
Thanks to all. I am not a paid member so I am not able to send any private messages.
I made some changes. I added some more to support my reasoning, proof read to the best of my ability and reformatted a bit.
If Admins would be kind enough to delete so that I could repost with the update then that will be great. If not, the given correction was much needed. Thanks
Bottom-line, there was enough in the pot for everyone to share. I was right when I said that the core still resides in certainty that lead to an agreement. With NOLs, recovery was unknown, uncertain and something that one had to work towards. With LT, recovery Edit: amount was unknown but certain with a question, what if the amount of recovery was bigger than assumed. It was the cap removal on LT and not the 5% tradeoff with respect to Edit: WMIH that lead to an agreement.
This is a long story which was in reply to what “patience360_han”, a well respected board member from boardpost.net said that caught my attention and helped me write this piece. It’s a far fetched thought and nothing has been proven yet, so, I am just sharing. Please bear with me and do read it in full. Thank you
How did Insider Trading get settled and what was the trade off.
SNHs strategy was a multi staged, multi pronged and a multi billion dollar recovery with no end in sight. It was a whole new level of playing field beyond us commons to comprehend. Their recovery was not just limited to being a creditor but a lot, lot more. In the realm of things, Federal Judgement Rate and NOLs were the weakest links and a tactical gambit within “The Plan” that they had to let go when left with no choice.
Let me opine on what Nate said and didn’t say, and address the multi-stage and multi-prong aspect of it.
So, when bonds were trading at or above par then, why didn’t they sell and move on, when their recovery through GSA was at 73%. Unlike the 100% immediate recovery in the open market, 73% recovery would have taken at least 3 months to resolve with no guarantee. So, was it for the NOLs, as there were only two types of recoveries in-store for them. In my opinion, thats what you are made to believe but is not the whole story.
Look at the following, what does it tell you.
Let me summarize. They made billions initially by shorting the stock prior to Bankruptcy. Then bought bonds on the pennies. Got a 100% recovery confirmed but were not done yet.
SNHs with prior knowledge, how the waterfall analysis would affect them, strategically valued and non-valued assets and claims and gifted assets without specific purpose. They even scooped shares (e.g., WAHUQ) in broad daylight, once it was confirmed that next class in line within the structure was the recovery point, thus holding intact their claim as an impaired class for plan confirmation purposes. For some reason, if the values for assets and claims were to become known in time which could have jeopardized the plan, they probably would have moved to the next class in line such as WAMPQ. So, not only would they have recovered 100% by shorting the stock initially, 100% on WMI notes, 100% on WAHUQ, but by moving to next class in the waterfall structure, SNHs would have kept their claim intact as an impaired class for plan confirmation purposes. They were no different than us, were doing exactly what we were doing. i.e. hedging the risk, with one exception, they knew exactly where the buck stops as they were the ones who controlled it.
Recovery was not just limited to bankruptcy but was way outside of bankruptcy as well.
Who negotiated the plan, “SNHs”. What were they doing negotiating with JPMC. And, what gave them this leverage that allowed them to sidestep FDIC and step-in their shoes. Or, was there more to it. Were they betting against their class members outside of bankruptcy on derivative contracts, credit default swaps, hedging instruments, insurance contracts…. based on their discussion with JPMC and both were profiteering from it.Our conclusion was long drawn earlier, that they’re all in cahoots in the name of “The Plan” with blessings from FDIC . What we didn’t know was the extent to which they could go. May be, we should look at the timing of the executions. Oh wait! these are third-party agreements that fall outside the jurisdiction of the Bankruptcy Court that are accorded special protection under the trade secrets.
Under court deposition, Sheila Bair went on record to say she advised bidding bank JPMC about the US Government’s intention to seize solvent Washington Mutual two weeks prior. Begs the question, did JPMC, along with GS short the stock leading to its demise. Or, was this exactly what FDIC wanted, so it could seize the bank. Wamu’s destiny was already written way in advance before it unfolded. Bidding and subsequent sale was just a procedure to formalize the process and make it legal.
When your fellow colleague opines, the secret code unheard off, yet understood is enough to know what is what. JMW hint through the 10 billion recovery was an indication of that. Insider trading was evident and SNHs were caught red-handed. SNHs couldn’t alter the course and if they did then why now.
Did it matter to JPMC if liabilities were with FDIC. Or, did it matter to SNHs if they could address the issue of recovery later on with FDIC. What was FDIC doing all this while. Why were they so tight lipped. Was it that she stepped over the line. Were there some missteps along the way. Did they leave a trace behind. Gag order speaks for itself. Too many loopholes forbidden from public eye in order to save face, all, in the name of justice.
You play along as long as everyone’s purpose is being well served. But, when one tries to pounce on his own, the real crime gets known. Just when she thought there was a closure, her ignorance lead her to believe that the can of worms will subside. What happened, JPMC said as per the agreement, liabilities are to remain with FDIC. The high headed Shiela, overlooked what her own fellow colleague from OTS was saying about Wamu. Only when, she was done with the seizure and subsequent sale, the shining star upon being duped probably came to her senses in time. Can’t really blame her, you see, she was in love with Jamie. Long Beach was well marketed to the inner circle with the likes of Jamie that could call for action on Wamu. Highlighting Long Beach and making the whole case against WAMU, when its Tier 1 capital ratio was more than that of JPMC served the needs of those panic stricken folks, who feared how the worst would affect them such as FDIC and JPMC. History was written, damage was done and there was no going back. Only question was how to fix it.
And, how did the current situation absolve FDIC of its liabilities. What makes FDIC get to say that it incurred “Zero” loss on seizure. If you say FDIC has no liabilities towards WMI, then, thats just a part of it. What about WMB liabilities. Deutsche Bank claim is pending resolution. If SNHs had taken over, then, how would it have helped fdic over claims. Are we saying that FDIC gave a 300+ billion dollar bank to JPMC with 4 billion undisputed cash just to inherit a 10 billion dollar claim from Deutsche Bank. Do you see the joke in this. It was prudent to understand the complexity, the inner workings and its aftermath effects before taking a hasty decision like the one they took with respect to seizure.
FDIC could have sold WMB with a token of love as initial payment of 1 dollar, contingent upon x, y, z, conditions. Any subsequent claims would have required exhaustion of administrative remedies under FIRREA before a judicial review was possible. Unfortunately, the document was not upto the mark. Among other reasons, it was the lack of completeness, its ambiguity, its vagueness, its inability to address the aftermath issues - that were all missing in the agreement. Bottomline, they couldn’t comprehend the complexity involved.
Resolution resides within the natural transition. Consolidation serves the needs in times of distress. What would have happened had there been no bankruptcy. IMO, we would have merged or been acquired by another bank similar to what happened with Wachovia.
Good or bad, the path was laid out and there was no going back. Moving forward was the only thing that make sense. Intention was to trigger a similar transaction in nature like what was done to Wachovia. And, to make it all work, FDIC needed a solid footprint to reign in on JPMC through a definitive document.
Call of nature in dire need. How did DOJ help. Take note of who all did the RMBS Working Group comprise of that lead to DOJ settlement.
Organizations have a very myopic view of the surroundings, outside of their area of expertise, and so, usually confine themselves to their own domain. Only a task force such as the one created who had the powers to be could have unraveled the truth. So, DOJ settlement cannot be viewed through the 13 billion dollar settlement amount, but, its needs to be seen from an eye that produced incriminating evidence against JPMC which lead JPMC to give in.
What did DOJ settlement do to help. Read inbetween the lines, the settlement basically gave FDIC a definitive document to move forward with. First, it established that JPMC did not become a successor-in-interest to WMB.
Second, it partially secured the interest of FDIC against Indemnification Claims
Third, the settlement did not absolve JPMC from facing criminal charges
Forth, and most important, FDIC reclaimed the title of being the successor in interest. May be, just a conjecture at this point.
You needed to dig in deeper to know what is what before you decided to cover it up or lay blame or try to resolve it. It was less important to nail the SNHs and Jamie, and more important to identify who all were involved, the root cause, how was it brought about, what could be done to rectify it, and how to prevent it in future.
If FDIC is able to transfer the liability over to JPMC and made to pay, if the Govt is able to avert the financial crises, if the investigation is able to identify the root cause and eliminate it, if the departments are able to address the loopholes within the rules and regulations that lead to the crisis, if shareholders are able to get what was there’s in the first place, then, I think the purpose, goal, time and effort... has been well served.
But, how was it triggered from within. Folks hear the word bankruptcy going around. Enquiring minds who wanted to profit from inside info got alerted. Those in the know how, wanted to cash in on it. They saw an opportunity and jumped in.
1 Given the situation, I think it’s all the more 2 remarkable that we’re here today before you with a 3 consensual plan that distributes meaningful recovery to the 4 WMI shareholders.
Does one really need to explicitly associate this to LT to make a point on reasonable recovery. The context suffices the point with respect to WMIH but doesn't stop there. Its not an absolute, which cannot be extended to LT for recovery purposes. https://www.boardpost.net/forum/index.php?topic=819.15
Bottomline, there was enough in the pot for everyone to share. I was right when I said that the core still resides in certainty that lead to an agreement. With NOLs, recovery was unknown, uncertain and something that one had to work towards. With LT, recovery was unknown but certain with a question, what if the amount of recovery was bigger than assumed. It was the cap removal on LT and not the 5% tradeoff with respect to LT that lead to an agreement.
Indeed, we are just simple minds who confine ourselves to the number game and what’s in it for us, who care less and lack understanding about the background that matters the most. In my opinion, Nate only addressed one side of the story. Either he couldn’t or choose not to address the other side, as it was not evident and shown in paper to exist.
Thanks DP. This is really what I was looking for,to break it in pieces and then try to connect the dots, and see if any of this makes sense. Appreciate your reply.
Just one question, is there a way I an update the post?