Mr Cooper Group Inc (COOP)

[Wamook]

The leadership at JPM wanted Washington Mutuals operations. But they looked it over and decided that it was a vulnerable operation that could be toppled and the elements it wanted could be acquired from the wreckage. So they made an insulting offer and publicized a negative perspective on the west coast bank. Six months of negative trading and negative reporting on the bank brought it down. They “Marked” this bank. And later they took it for everything it had. They worked the system and they worked the press.

But this was the airplane hitting the building in early October of 2008. Fear and panic caught fire all around the world. Jamie Dimons name should be spoken right along side Mohamed Atta. But in a world where you can tell the newspapers what to print about you, and they do it, this rock star banker gets named banker of the year.

It is systemically important that a bank of such great size not simply pursue a bottom line at any cost, but that's not what these playboys learned at business school.

The lawyers for Wamu find themselves in the position where they have many many causes of action against many many people and organizations. And they have the ability to argue that investors have no right to participate in any recoveries they make. With these elements of leverage, they could easily force a small settlement from JPM and the FDIC, pay off themselves and the creditors, and sweep the whole matter under the rug. There is a great temptation to profit modestly and quickly for these lawyers. They’ve been working diligently for sixteen months to reach a settlement where equity concerns are simply severed from the estate.

If the settlement is small, it's easier to sweep the whole thing under the rug. Nothing really happened. It was just a bankruptcy. A lot of people lose money in the stock market. So what.

But if the settlement is large heroes become villains. And the newspapers become shills. The politicians become incompetants. Bankers are supposed to be greedy! Not Responsible.

Ken Lewis said that he wouldn't have dreamed of touching WAMU because he knew the stock holders would sue him for a Gillion dollars if he did. Let's continue to prove him right.