Posted by Jack Lee
WaMu is taken over by feds, investors stunned as another large U.S. bank fails! JPMorgan Chase acquired the deposits, loans and branches of Washington Mutual on Thursday.
Many Washington Mutual customers shaken by bank failures and persistent worries about WaMu’s ability to meet federal banking margins began jumping ship about a month ago and this depleated the company of about 12 billion dollars in assets. The sub-prime loan losses, the exposure to future losses and the liquidity problems was simply too much even for this banking giant. Now the feds have stepped in, seized WaMu, and it’s stock has fallen to zero. Another one bites the dust!.
The Feds quickly sold WAMU to Morgan-Chase for 1.9 billion. You can bet Morgan paid pennies on the dollar for the assets. This latest failure is now the nations largest banking collapse, eclipsing Lehman Bros, Bear Stearns and Indymac and exacerbating the dire situations at Fannie Mae and Freddie Mac.
All this begs the logical question, who’s next?
While uncertainty has held the stock market in check for nearly the entire session, the growing consensus is that a federal asset funding plan will be approved. Still, there is little clarity when political infighting will cease and a plan will be announced.
Need answers about your WaMu bank account or CD’s? Read on…
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