Apparently the government brokered the deal for JPMorgan to acquire the WaMu deposits. Of interest, the deal will not impact the FDIC Insurance Fund.
JPMorgan to acquire deposits of Washington Mutual – Wall Street Journal
Posted in * Economics, Politics, Economy
A great relief if all goes well. The parish has an important account there, as do I personally. It’s been a nerve-wracking week. I did not want to contribute to a run on the bank, but it was still worrying considering reports that the FDIC would be brought to the breaking point if it had to cover a WaMu collapse. Even with a buyout we’re still going to want to keep an eye on it, and balance the difficulty of switching banks with the instability of WaMu (it’s easier for me to switch, not as easy for the Church). Of course this raises the question of who to switch to; it seems nearly everyone had their hands in the sub-prime cookie jar.
Alta Cal [#2]: Even if the FDIC were to deplete its reserves, your deposits would still be fully protected up to the legal limit of $100,000 per depositor per bank.
Why is JP Morgan getting all these sweetheart deals?
First it gets the good assets of Bear for pennies, while the government gets the toxic waste.
Then it gets to unload 200 billion of its own garbage on Lehman right before the firm goes into receivership.
Then it gets to short sell precious metals in the closing minutes for several days, unloading 30% of COMEX paper silver and gold shares to trigger sell programs.
And now it gets all the good assets of WaMu.
JP Morgan is the Derivative King. It has 7 trillion in CDOs outstanding, vastly more than anybody else.
Is this another example of “too big to fail, so we’ll feed it under the table?”
Clueless raises good points. The report is that Chase outbid three other banks. But I share his concern about Chase’s remaining derivatives exposure.