It is likely we will never know for certain all the facts that Willingham and others know about the seizure and sale of Washington Mutual Bank (WMB), or the subsequent bankruptcy of Washington Mutual Incorporated (WMI) and its subsidiary. However, we can collect and analyze the facts that are available to us and come to a possible conclusion. The first premise is that before the seizure of WMB and the bankruptcy of WMI, WMI reported it was worth more than $300B dollars in value (assets). This did not include the deposits (liabilities) of WMB. The FDIC-R accounted for those deposits and so stated. The reported pre-bankruptcy value of WMI should have included the value of all its subsidiaries – but not those subsidiaries of WMB. Forget WMB, forget its value, forget redacted statements, forget closed-door meetings, forget everything else and keep your mind concentrated on the reported value of WMI. If there was a value to WMI before the bankruptcy, that value (less paid debts) still exists.
It is important to keep in mind that the value of WMI pre-bankruptcy was greater than the value of WMI after they filed bankruptcy. WMI claimed approximately $32B as a value for the bankruptcy and could not claim the massive $300B plus value located in the trusts and exempt from the bankruptcy. So, we have WMI in bankruptcy with a value and, separately, we have WMI participating in the trusts with a value and that value exempt from the bankruptcy. The original WMI no longer exists, and the WMILT, as successor in interest of WMI, manages any residue of the value (assets) allowed in the bankruptcy. The trusts and the income stream from those trusts still exist and WMIH now owns any value in those trusts that WMI formerly owned because WMIH is the reorganized WMI.
If the value still exists and WMIH now owns that value, why is the PPS so low? It is low because WMIH wants it low. See posts by AZCowboy discussing embedded derivative.
Like playing pachinko, keep your eye on the ball (value). It matters little the route the ball makes to get to the end of the maze, it only matters that it lands on a winning spot.
Best regards,
David West
