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Anything is certainly possible when it comes to settlement, however, keep in mind these are non-cumulative. Which means when a dividend is missed, the company doesn't owe restitution before making payments to other obligations.
"7.75% Series R Non-Cumulative Perpetual Convertible Preferred Stock" Taken from the title of the prospectus.
I concurr with your anaylsis. I've felt for awhile that Weil is going after cash. WAMU can likely regain some of its old customers if they re-enter the market. Also, with cash, they can acquire other banks on the cheap right now. The FDIC is anticipating a significant number of bank failures over the next year or two. (I was at a seminar talking about the banking industry a week ago.) I don't think they want to wait too many more months to make this happen. There is significant opportunity in the market place now. IMHO
Go Quinn - indeed playing hardball with this one. Show me the money and make a ruling.
My favorite line in the brief found on page 25:
"The court clearly got it right when it denied JPMC's motions to stay and dismiss. It is respectfully submitted that the Court should swiftly reject JPMC's high-handed contention that by the ministerial act of filing the Putative Appeals it has awarded itself the relief that has already been twice refused by this Court."
JPMC, presumpteous as always. I'm really looking forward to this court date tomorrow. Let's hear from the THJMW and receive a verdict on the 4B!
Tarp had two components, the money barrowed, which JPM has paid back and the warrents, which would allow the taxpayers to participate in gains at the banks receiving $$$. JPM has as noted in your link paid back the barrowed funds, but is still working on the Warrents.
All short sales are treated as short term capital gains, with rare execeptions. That's not what they are waiting for.
It also has more liabilities.
I like this play though. I think this takes another year or more to sort out, and letting the overall market rebound won't hurt as the derivities get unwound, and regain a significan portion of their value.
Got me, but he found a broker that was willing to fill at 5.00 then it mostly filled at 4.75 with the balance at 4.99. I think someone doesn't want this at 5.00.
Got me, but he found a broker that was willing to fill at 5.00 then it mostly filled at 4.75 with the balance at 4.99. I think someone doesn't want this at 5.00.
I just called my broker, as I was trying to get an order filled, and he said it wasn't a real ask. However, I think my order is going to be filled shortly!
I don't have any real idea of how the 18B in damages was calculated, but it is related to trademark infringements, so totally separate from the 4.4B.
Yes, indeed they are. I'm just looking at what ratio of PQ's KQ's and UQ's to hold.
Thanks for the tip, I was missing out on a lot of great info!
What's the face on these? I had thought it was 25, but someone mentioned 50 a bit ago. Can anyone confirm or let me know where I can find the details on this?
Thanks
You can disregard this notice, as it has expired. I received a similar message, and called to get details.
I'm also at Scottrade, and wish I wasn't but feel this is a bad time to be moving. I'm looking at making a change soon though.
It appears that I'm not, which I'm fine with.
Mostly, I'm just playing with pinks and seeing how and when good times for movement (buys and sells). I was also going to move to another class/stock for current gain opportunity.
I've had an ask at 4.00 all afternoon, only sold 100 shares.
I'm in, I'm already fully loaded, but just sold a few other shares so I can buy a few more here!
I like the haiku he put in at the bottom - this journalist usually throws a Haiku at the end of his articles.
Today's Econ Haiku:
Life goes on, they say
Not Washington Mutual
Suicide, painful
Let's turn this around, and breathe some life back into WAMU!
It is earily similar, I'm hoping it continues to an actual settlement this time!
I've been in since December, but a buddy tipped me off in March to buy some more shares as something was about to happen. Not sure his sources, but he was right on the money. He called me again last week and said news was going to be coming out in bits and pieces, but to hang tight, we were in for a good ride!
So far so good. I'm really looking for the big pay day at the end, SETTLEMENT! However, this is great to watch the prices rise, and the PQ's and KQ's are also starting to move a little again, that's the best joint signal to me.
GO WAMU!!
If it was going to just be a stock swap they likely would have already done it. However, there is going to be cash, and that is why it isn't done already. Patience, cash will be better in the long run.
I hope there is something good, like a smoking gun, because that will help drive a larger settlement, and likley sooner!
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!!!!!
I'll second that!
I concur - see IRC 1233, short sales are always short term captial gain.
I'm of the opinion that a significant portion are likely MM and/or JPM and related.
zab, you don't need to stand corrected, see my previous response. The IRS will charge taxes for short transactions that become worthless.
Don't put any stock in that article, just because it is posted on the an investors website. I guarentee you that if the IRS finds out, they will impose taxes. In fact, once the stock symbol officially goes away and is substantially worthless, they must recognize a gain.
See IRC 1233 excerpt below:
"(h) Short sales of property which becomes substantially worthless.
(1) In general.
If—
(A) the taxpayer enters into a short sale of property, and
(B) such property becomes substantially worthless,
the taxpayer shall recognize gain in the same manner as if the short sale were closed when the property becomes substantially worthless. To the extent provided in regulations prescribed by the Secretary, the preceding sentence also shall apply with respect to any option with respect to property, any offsetting notional principal contract with respect to property, any futures or forward contract to deliver any property, and any other similar transaction.
(2) Statute of limitations.
If property becomes substantially worthless during a taxable year and any short sale of such property remains open at the time such property becomes substantially worthless, then—
(A) the statutory period for the assessment of any deficiency attributable to any part of the gain on such transaction shall not expire before the earlier of—
(i) the date which is 3 years after the date the Secretary is notified by the taxpayer (in such manner as the Secretary may by regulations prescribe) of the substantial worthlessness of such property, or
(ii) the date which is 6 years after the date the return for such taxable year is filed, and
(B) such deficiency may be assessed before the date applicable under subparagraph (A) notwithstanding the provisions of any other law or rule of law which would otherwise prevent such assessment.
Thanks Jerle!
I'm starting to realize that Scottrade is not serving my interests very well either. I had a offer to sell in, but it didn't show up in someone's L2 postings. I think it might be time to find another platform. Do you have any suggestions? I'm trading Lehman and Wamu preferreds.
Thanks
Concerning Shorting of the stock, there is no tax benefit to JPM for waiting until after the one year to settle. They will only receive short term capital gain treatment on their gain from shorting the stock. See my earlier post discussing IRC 1233.
There may be other benefits in waiting until after one year because of their agreement with the FDIC, which has upto one year to revise their purchase agreement. But that is a different discussion.
Okay, Catz, you are completely correct. Short Sales are short term capital gains.
It's time to end the discussion regarding long-term capital gains for all of the shorts covering.
Catz posted IRS pub 550, which has the IRS position that all short sales are short term capital gain. I just was reading the Internal Revenue Code section 1233 and there is a small window that may lead to long-term capital gains, but I'm certain that none or at most very small percentage of short's are also holding substantial similar shares of WAMU.
Shorts will cover when they feel it is in their best interest. Period. If it is in the next week, prior to the anniversary, then it will be because they know or believe that settlement is coming and share price will be increasing.
Yes, the example is regarding a capital loss, but the important point is the IRS position is it would be short-term. (And for losses, you prefer them to be short-term). I'm not in complete agreement with the IRS on this position, I'll see if I can do a little research over the weekend to support a position different from the IRS.
Yes, I am a tax accountant.
I have not done any real research on Short Sales. It certainly is clear from the portion of IRS Pub 550 posted that the IRS position is that it would be Short Term capital gain, period. IRS Publications are not tax laws, so I don't know if I could find other better authority to support a postition for long-term capital gains based on when the position was open, if it was longer than a year ago. If the shares were "borrowed" from the broker a year ago, that might be sufficient, I'm not sure.
Also listed on this page was a response to an earlier post last week regarding some hoping that they would become worthless, and not pay any taxes. This again is not the IRS position, and I would be more inclined to believe this one is supported by actual tax law.
Short sales qualify for Long-term Capital gains, if the holding period exceeds one year.
As an accountant, I've not had a short sale to report as long-term capital gain, as most shorts are covered rather quickly. It's typically a relatively short term play. However, this is obviously a long-term situation we are discussing, as we approach the one-year point of the FDIC seizure. So once we reach Sept 25th, it's safe to say that all of the shorters can cover and then obtain LTCG treatment.
Can't say zero any longer, but only 12 shares. Everyone's holding them. I know I'm holding mine!
And Russell bought the building for 1/3 price.
http://seattletimes.nwsource.com/html/businesstechnology/2009842061_webrussell10.html
Did Wamu sign off on this? I would think they would have wanted this back, especially at that price. I still think WAMU is going to get a favorable settlement and return to business, but maybe not centered in Washington after this goes down.
Or incomplete links.
If bondholders are negotiating a percentage and 2$ to $3 for commons is a negotiated buyout, then I would guess that preferreds would also be a percentage of face value maybe 30-50% maybe 75%, hard to say.
However, if it is cash paid to WAMU to pull out of bankruptcy, then I'd guess that is a whole different ball game.
Didn't TPG have some preferreds that they converted to commons shortly after FDIC seized the bank? I'm not sure if that was because they had better leverage as commons or if it is because they felt there was a better return on investment there.
Looks like Chase has a buyer for the old WAMU building in downtown Seattle. I didn't realize that Chase had clear title to sell this building, even though it won't be complete until late 2010 it sounds like.
http://seattletimes.nwsource.com/html/businesstechnology/2009832214_webrussell09.html
Any thoughts?
JPM is certainly covering themselves well in this statement. They must give a picture of the on-going litigation, and certainly have laid their argument out showing favorable towards themselves. This is to be expected. They have maintained that they are in the right, and standing on solid ground, and they will continue to, as they must. They certainly don't want to open themselves up to further action, because they have misled their shareholders. As they have previously stated, they do not believe there is a material adverse liability. They say this for two reasons, one as mentioned above they have to follow their logic and legal positioning to prevent further action against themselves, and second because if they actually stated there was a realistic adverse liability they would be required to accrue a liability in the estimated amount. They sure as H aren't going to do that. As it would be a number that could also get them into further trouble when it comes out two or three or ten times higher.
The best part of course is the bold part were JPM is starting to cover their A$$, and include quite strong language that there is a real possibility that they will have to fork over some cash. This is looking good! This is looking real good!!!
I won't speculate on time period, but I'm of the opinion that this had to be submitted in a 10K before they could settle, and this is just another step closer. We are knocking at the door!
Go WAMU!