Washington Mutual Preferred fka WAMPQ

[Chiron]

Preferred are a better bet than commons because the current POR states they will see something in liquidation. The reason we are at this level is that no one knows what that is as Rosen did not provide financials. Speculation ranges anywhere from 0 - $200 with the NOLs going to JPM.

The NOLs are still in dispute, the FDIC does not want them going to JPM. So what happens now? Does JPM give up the NOLs, they go to preferreds and the ordeal ends?

None of us have the answer at this time, and not even WMI and Rosen do. They don't have the FDIC on board over the NOL issue. I don't see how the FDIC will change their position.

It's a quandry, and the reason preferreds are not lower or higher is because there are too many unknowns. If it came out tomorrow that the FDIC say sure, give all the NOLs to JPM, and then the financials showed preferreds at 0, well obiously the pps would adjust.

Or it could come out that the EC has reached a new settlement and the preferreds will see 80% of FV in liquidation.

Too many unknowns right now, and typically that is not good for a pps - as we have been seeing. But the good chance things could turn around keeps the stock from going too low.