Mr Cooper Group Inc (COOP)

[WaS]

JPM sold 11.5 billion in stock, I believe on 9/26/08 to bolster it's funds as it took over WaMu.

This is one of the subtle little question marks as far as when JPM knew what.

They were out soliciting investors well in advance of the seizure. That's how they were able to raise this cash in a matter of hours.

I'm fairly convinced they were so hard up for cash (insolvent) at the time that even with FSB's 30 billion or so in cash, they still needed more to stay afloat and they just used the WaMu acquisition as an excuse to raise more without causing anyone to raise any eyebrows.

http://blogs.wsj.com/deals/2008/09/29/how-jp-morgan-raised-115-billion-in-24-hours/

"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."

Go back and look at what the head of the OTS told Bair not to do... as in, NOT to go out and interfere with WaMu's ability to sell itself by reaching out to phone any friends to ask about interest in buying them via FDIC auction.

But obviously Bair did and the rest is history.

Of note, unless Bair called other banks as well, this little phone call mentioned in the article was in breach of the FDI Act as they gave an unfair advantage to JPM in the auction process.

Who else had 3 weeks notice to call around and raise cash?

"Here’s how it worked. J.P. Morgan picked 10 major financial firms that could help the bank raise money.

J.P. Morgan’s bankers called the 10 chosen firms and posed a question: the bankers were advising a U.S. bank that was contemplating a strategic acquisition of a retail bank, and a capital-raising could be connected. The bankers could not reveal their client until the bidding was done. Did the investors want to hear more? If they said yes, they would get details; if they said no, they would be left out in the cold on a deal that could potentially move the markets.

Nine of the 10 investors that J.P. Morgan invited said they were interested in hearing more. As soon as they agreed, they were asked to sign confidentiality agreements that would make them official J.P. Morgan insiders, which would mean that they could not trade in the bank’s stock."

You can bet your ehhh, fill in the blank that these banks might not have been trading JPM stock, but they were shorting the heck out of WaMu.