From yahoo boards......Fraud ......Playing both sides.
The fall of Washington Mutual wasn’t a surprise to the government. Nor was it a surprise to J.P. Morgan.
Three weeks before J.P. Morgan bought WaMu’s deposits for $1.9 billion, officials at the Federal Deposit Insurance Corporation had called J.P. Morgan to say that the FDIC was carefully monitoring WaMu and that a seizure of its assets was likely. The FDIC said it would want to immediately auction off WaMu’s assets if a seizure was necessary, people familiar with the situation told Deal Journal.
Associated Press
J.P. Morgan was well-prepared, then, when the FDIC asked for bids on Tuesday, Sept. 23. On Wednesday night, the regulators told J.P. Morgan that the bank had won the bidding, one person close to the situation said. The Wall Street Journal reported the sale at around 7 p.m. on Thursday, and J.P. Morgan hurriedly called a conference call in two hours to discuss the sale.
But that was just the first step. J.P. Morgan had known for three weeks that if WaMu was seized, and J.P. Morgan won the assets, the big bank would want to raise enough capital to keep its Tier 1 capital at at least 8%. Tier 1 capital is the gauge of a bank’s health watched by regulators, and it measures whether a bank has sufficient capital to cushion future losses. The federal government requires a minimum Tier 1 ratio of 4%, and 8% is typically thought to be robust. J.P. Morgan’s plan was to gather $8 billion in one big capital-raising, which would put its Tier 1 ratio between 8% and 8.5%
