Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Quick Hits: Who Wins In WaMu Purchase?


Brief scrutiny of today's headlines.

There are two winners in JP Morgan Chase's (JPM) purchase of Washington Mutual (WM): the Federal Deposit Insurance Corporation and Chase.

The deal prevents WaMu's collapse from further depleting the FDIC's insurance fund. JPMorgan Chase says the purchase will add about 50 cents a share to its earnings in 2009.

The FDIC seized Washington Mutual and then sold its banking assets to JPMorgan Chase for $1.9 billion. JP Morgan plans to write down Washington Mutual's loan Minyanville's Why Wall Street Will Never Be the Sameportfolio by about $31 billion. However, this could change if the bailout package now pending in Congress is approved.

Washington Mutual is JPMorgan Chase's second major acquisition this year. In March, the bank purchased Bear Stearns, a venerable Wall Street investment bank, for about $1.4 billion, plus about $900 million in stock.

JPMorgan Chase is now the nation's second-largest bank, trailing only Bank of America (BAC), which recently snapped up Merrill Lynch (MER). JPMorgan Chase says it plans to raise about $8 billion by selling shares of common stock.

Washington Mutual's collapse is no surprise in view of its heavy mortgage loses. Earlier, Standard & Poor's warned that the bank was near collapse.

Wells Fargo (WFC), Citigroup (C),Toronto-Dominion Bank of Canada (TD) and Spain's Banco Santander also considered taking over Washington Mutual.

Want top traders to sit at your desk and share their insight and ideas?
Minyanville's Buzz & Banter - 14 day FREE trial

< Previous
  • 1
Next >
No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Featured Videos