Replies to post #371888 on Mr Cooper Group Inc fka COOP

[fsshon]

She has publicly stated that she felt WAMU was systemically risky and therefore it was in the best interest of the financial sector, that JPM being the only bank with a so-called "fortress balance sheet" was in the right place at the right time to acquire WAMU. She also mentioned that since JPM had done the due diligence on WAMU prior to seizure, that they were the only bank in the perfect position to get WAMU. Others had a chance to buy prior to seizure, but turned WMI down. Toronto Dominion wanted only East coast, the FDIC/OTS did not like that idea at all. WMI wanted to recapitalize WAMU, FDIC did not give them the OK.

Now, we can debate the facts on Project West and actions of many leading up to seizure, but put yourself in the FDIC's place. Not the people who were allegedly having off mic conversations with JPM executives and may now work for them, you have to put yourself in the office of the organization (FDIC) that is in charge of making sure that systemically risky banks (even though solvent) need to be broken up to prevent a total banking meltdown and effect the pensions and financial savings of millions of American's and foriegner's to boot. Americans need to know their money (in these banks) is going to be there in the morning, or, they will withdraw it in panic mode and start an "all out bank run" that will basically take out any bank.

Unfotunately WMI the holding company got screwed in this deal, but they are the ones who decided to take on more risks for profits. JPM has done the same with their derivatives contracts that can not be fulfilled if called upon to do so, so now they are a systemic risk to the financial sector and need to be broken up. Just like CIti, BofA, Morgan Stanley etc.. Too Big Too Fail is no longer a doctrine.

So, we have to do a historical look back and see it for what it was. WMI is directly responsible for the seizure and sale of their banks, along with some other nefarious characters who saw "blood in the water" and acted like the sharks they really are.
Looking the other way on WMI fault is not the right mindset in this debate.

Harsh Reality for All on Sept 25, 2008!