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Market makers have special exemptions from the rules: they are allowed to carry a naked short for up to twenty–one trading days before they have to borrow a share. When the share is not borrowed in the allotted time and a buy–in does not occur, and they rarely do, the naked short becomes a fail–to–deliver (of the borrowed share).
How come people think that there are thousands of these P's and tens of millions of U's that are still naked short from Sept 2008? According to this, it's impossible unless every 21 days the MM's renew their shorts.
Thoughts?????????
Steve
$250/hr for a paralegal? Why am I in law school? LOL
I'm starting to think that the 6BB is part of settlement numbers being discussed b/t Susman and JPM. My theory is that Susman is asking for a higher number like 50BB for example w/all his reasons why they should get 50BB and JPM agrees w/at least 6BB of his offer. In other words, Susman has an itemized list of all the things that JPM is liable for and 6BB are for sure what JPM KNOWS they are responsible for (probably based on the examiner's work and JPM employees' answers). IMO
Steve
Edit: sorry if someone else has already postulated the same idea
It's on every front page on the internet; cnbc, wsj, cnnmoney etc
It's why the commons shot up today (just a reason to take profits and roll them into P's)
http://online.wsj.com/article/SB10001424052748703694204575518222345640774.html
That's more believable. Volume should break a 4 month high if it cracks 40k. I've realized that traders view the commons as the best trading vehicle for WaMu hence the disconnect in pps moves today (and many other days since Boston Stocker's news article hit the media).
LOL Feelings change when the facts change.
Sorry, I meant the daily RSI. I know the daily RSI is more volatile but I like to see when the buying and selling is happening.
http://www.google.com/finance?q=PINK:WAMPQ
Google finance is showing RSI at basically 0-meaning everyone is getting the hell out. Is that what you're seeing on your charts? I find this very hard to believe. Volume is no joke. I wish I had another 25k to put into this right now.
I've thought the same, especially the retail banking centers. But, some, if not all of the subs, and all of the mortgages that WaMu is holding shouldn't, IMO, be too difficult to transfer to a new buyer.
Is CRTC on the bid?
IMO, this is a "leak" that a lot are looking for. JPM's attorneys know what questions JH is asking and what answers JPM execs gave. JH and co. are obviously doing their job. IMO, we're all gonna look back in a couple months thinking how obvious the current pps of WaMu classes were a complete steal at the time this article came out.
FDIC will counter that JPM should have paid 20 times that amount and then ish will hit the fan for JPM while shareholders reap the reward. I can't wait to hear the FDIC's counter. It will only be positive for all classes.
IMO, this article is telling us that JPM knows that the pref's will have to be paid off whether they or the FDIC does it. The article says JPM is seeking up to 6BB which would pay us off and leave about a buck or two to commons depending on the TPS outcome. Everyone on this board is talking about leaks into the market that would drive up the price. IMO, this is our "leak" and there may be more of these leading up to 11/1. If you look at a lot of the recent m&a deals in the market, a lot of them were reported several weeks prior in the media as rumors--especially the wsj. This is exactly what most of us have been saying all along (pref's get paid in full and commons a buck or two) and now it's 90% confirmed.
Obviously JH and his team are asking the right questions and JPM knows they're gonna be held liable based on JH's accrued evidence. I have this feeling that around Thanksgiving I'm gonna be looking back and upset I didn't buy more b/c it so obvious what is going to be reported.
http://online.wsj.com/article/SB10001424052748703694204575518222345640774.html
K thanks. I remember the dropped shareholder claims but didn't know what their new claims were over.
Are they upset that the bonds they're holding are trading at above par? I'm being sarcastic but in a nutshell what is/are the remedy(ies) they're seeking?
Thanks
Wow, that would be nice. Although, there are only 5MM o/s (according to google finance), which is definitely not our case. If you've been following company, can you post something that has to do with the examiner's findings? It would be nice to see the balance sheet pre and post examiner's report to see how much of a difference the examiner made to shareholder value.
a group of insurance companies that is suing the investment bank over claims on $50 million in bonds issued by Washington Mutual Inc.
What securities do the Texas Group hold? I thought they had an interest in the Caymans but I'm not sure. Thanks
What's FTP or VPN?
Ya it was just a metaphor to use but I think you get my point. Funny that I was just thinking that depending on 11/1 this Christmas is either going to be the best or worst ever for me lol...
JH has the opportunity to be our financial savior or adversary for the rest of our lives and I don't want anyone/anything getting in the way, especially if the examiner's report isn't as meaningful to them as it is to us.
having more input and having more eyes on the examiner is always good ,esp to make sure he doesn't miss anything ....
How many people do you need in the same room? The examiner is the only way we're gonna see a dime so I'm not that excited about this. I'm worried it will just be a distraction to the examiner's team. The examiner has been digging things up for almost a month now, so it would make sense for the TX Group to first see what JH's team has uncovered before they put in their own hard work. Assisting the TX Group to go through the examiner's DD imo would be a waste of the examiner's precious time since he's working on a deadline.
We only benefit from a favorable ruling to Texas Group if the examiner says A>L. It's not necessarily the same for them.
Maybe I'm making too many assumptions...
A part of me thinks that they may be stepping on the examiner's toes by getting in the way. Oh well, it's always better to take a little longer and do it right the first time. Can't wait for 11/1
Is the examiner not looking into the GSA on their behalf? Obviously this is good for equity b/c it shows that Walrath lacks confidence in the GSA.
Can u or someone else give a brief summary on the importance of Texas Group's ability to participate in discovery? I'm not sure why this is necessary when JH (I'm assuming) is looking into everything for them. I'm probably wrong. Thanks
Steve
Assuming your the person on the Y board that talks to Susman on the phone, why don't you record your conversations w/him? I'm sure he wouldn't mind if you told him you were going to record it. I doubt he's gonna say something to you that he's not supposed to, and there's hundreds if not thousands of people that would like to hear these conversations to be able to come up with their own interpretations in case something significant like "it's all over" is said. Thanks
Steve
I wonder if the FAZ and SKF's of the world have anything to do with the high short amount for those financials? SKF was around during WaMu but FAZ wasn't.
I know everyone hates Cramer on this board but he did say many times that these leveraged short ETF's caused massive damage (referring to them as WMD's of Wall Street)
But the real issue is how sloppy the transaction was in that no one knows exactly what JPM got or what they should have gotten. FDIC taking over WaMu is pretty much on par with the health care bill that no one knows what the hell is all about, what it contains, and what the consequences will be.
I honestly feel that it was. A couple weeks ago I was posting on wamuq about mark-to-market accounting and how it led to WaMu's demise but I also think that played a significant factor in the FDIC's price it was willing to "accept"
Edit: especially since the FDIC normally was entering into loss sharing agreements w/these big banks and in this case they didn't have to
I've read this board and wamuq since Nov 2008 and I didn't join until over a year later.
How many of the bondholders that he represents are also post BK holders?
Rosen has to be creative and come up with arguments. He's a lawyer and that's what he gets paid to do. If this is true, then it is obviously an act of desperation. It is very common for attorneys to argue something that clearly doesn't apply just because they have to have something in their defense.
I like how there's over 40MM shares short but it says that there's 4.1 days to cover. The highest volume we've had in the past 7 days is 3.1MM which would make it about a 13 days to cover ratio.
That's a lot of info. Must have taken at least an hour or two to compile all of this. I hope others take the time and review this info. One thing that would help newbies would be to provide a one or two sentence summary of the links you provided or the key page # reference, that way readers can do a quick keyword search in the document and read the key paragraph or two instead of reading all the pages e.g. 28 page kerry killinger's statement. Thanks for the hard work
Steve
Then why wouldn't/didn't the WaMu executives say anything like that before the senate hearings?
I believe the same; we do know what can happen when we have positive momentum based on what we saw last December. I've told as many people as possible that they'd be idiots not to put 500-1,000 into this if the expected outcomes are 0 or 500 in 6 weeks w/o even telling them about WaMu's hidden story. No where in Vegas can you get these kind of odds!!!
I think that a positive examiner's report stating that the tax refunds belong to the estate should bring these to about $500/pps before the TPS litigation outcome. If the TPS turns out to be positive for us then the P's should easily be worth face (less TVM discount). I think a negative report will basically put these at 0.
So for $31 now, these should either be worth $500 or 0 in 6 weeks. I don't know how to plug these numbers into an equation to find the expected odds based on pps and the 2 potential outcomes (0,500) of 11/1 being positive for us (500), but it's got to be less than 1:10 (maybe even 1:20-any mathematicians here?). These odds are kinda scary but it just seems to be too low based on what we know. GLTA
Steve
Aren't they shorts b/c they're hitting the bid? I don't have an L2 to see it but that's what it looks like.
I don't think there's any possible way of deriving the outcome on 11/1 based on the market's price. I understand the idea of a leak and all, but it is illegal and every week we've seen big takeouts with high premium that weren't expected the previous trading day.
Are Rosen's clients (the bondholders) allowed to sell their bonds or do they have to hold onto them?
If they can't sell them (now trading at over par value) they've got to be putting intense pressure on him to get this shish over with so they can cash out and make their millions.
It definately strongly suggests/infers collusion. Hopefully JH evaluates the email (and hopefully others similar to them that he finds) when he examines possible claims against JPM.
Good luck on 11/1
But he was not the CEO of WMB, he was the CEO of WMI so he did expect to remain on board and bring WMI out of its problems.
BK rules presume that the debtor was insolvent 90 days before declaring bk whether it's true or not. So even if it's not true that WaMu was insolvent, he's still screwed. It's kinda sad but it's a risk that hopefully he was advised on before he took the job. Think about people that got a transfer of money the day before a major catastrophe that caused their business to go BK? No way that they could have foreseen the catastrophe.
I'm not arguing with you it's just the crappy rules. Kinda like Williams TD catch against the Bears that was called away. Good call but crappy rule.
You make a good point about the employment contract. But is 20MM for 17 days a reasonable salary or an inside transfer/fraudulent conveyance?
BK rules stipulates that such a transfer 90 days before the debtor declares BK can be void by the trustees strong arm powers, and a transfer made w/in a full year before the BK can be voided.
A lot of times courts will evaluate the fairness of a contract in terms of effect on third parties--or in this case on investors and creditors. So the question is: was this guys 20MM parachute consider a transfer under BK code? Apparently so.
I think they'll eventually pay a much higher price for the portfolio and that they won't get the tax refunds.
Even in this letter Dimon explains that it was unfavorable for them to buy WaMu b/c of mark-to-market accounting.
From the last sentence of the first big paragraph:
Asked why did JP Morgan not buy WaMu and instead TPG injected the capital; Jamie replied he thinks the potential losses are higher than TPG is estimating, plus their losses are limited to their initial equity investment, unlike for JP Morgan (or any other USA bank) which has to mark to market and assign/inject additional capital accordingly.
We can infer that they were colluding from this letter, but the evidence isn't 100%. All I can go off are off the facts and so far I haven't really read or seen conclusive evidence that would make JP Morgan 100% liable for collusion/unfair competition. If so, then the DOJ/SEC would have already been on it (hopefully). Maybe they're working on it (like how long it took for the Goldman Sachs deal)? Maybe they're waiting for JH's results? I also don't know how common it is for other banks to meet and discuss strategies especially when they all "advise" each other. Maybe just the fact that they met is against the law? I don't know, but my intuition says it's ok. But it definitely looks shady and makes me think that there is much more than we know about.
I still think there's a lack of evidence until JH's full report comes out. Part of his job is to evaluate tort/civil claims, so if there was actual collusion b/t FDIC/JPM/Banco Santander, I sure hope JH and his crew finds it. That's all we can hope for. Until then, we can all hope, speculate and accumulate.
So what do you think of their CDS prices? Warranted? Bogus? JPM bid them up? Just curious. And I won't try to counter your opinion b/c I realize it will only be your opinion and pretty much unprovable (much like a lot of this mess).
We're pretty much in agreement you'll see if you go back and read the thread.