As we reported yesterday, WaMu posted an increase in their savings account APY to 4.00%. We called this a sign of desperation. It was announced late Thursday night, JPMorgan Chase will buy Washington Mutual for $1.9 Billion, marking this the biggest bank failure in the nation’s history!
WaMu is the 13th bank to fail so far this year and this is JPMorgan Chase’s second major purchase this year. Earlier this year JPmorgan acquired investment bank Bear Stearns, in a deal also forced by the government. JPMorgan Chase will acquire $307 billion in assets and $188 billion in deposits from the WaMu-JPMorgan deal.
What does this mean for WaMu customers?
According to Federal regulators, the transition for WaMu customers would be “seamless.”
FDIC Chairman Sheila Bair said, “There will be no interruption in services and bank customers should expect business as usual come Friday morning.”
The WaMu-JPMorgan Chase deal will not have an effect on the FDIC deposit insurance. Your deposits will still be covered up to $100,000.
I can’t help but think, which bank is next to fall?
Sources:
JPMorgan buys WaMu
Bailout in chaos, feds seize WaMu
September 29th, 2008 at 2:22 pm
Wachovia is next. Now who is next I dunno
September 29th, 2008 at 3:06 pm
Yep, I could see that coming because Wachovia was in the same boat as wamu.
Look out for Etrade :-/
September 30th, 2008 at 4:38 pm
Sov is not looking good…
http://finance.google.com/finance?q=NYSE:SOV
October 1st, 2008 at 8:56 am
Yah this is why.
SAN FRANCISCO (MarketWatch) — Moody’s Investors Service on Tuesday lowered the ratings of Sovereign Bancorp (SOV:Sovereign Bancorp Inc
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Last: 3.95+1.62+69.53%
4:02pm 09/30/2008
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SOV 3.95, +1.62, +69.5%) to Baa2 from Baa1 and its lead thrift Sovereign Bank to Baa1 from A3. All ratings have been placed under review for possible further downgrade. The downgrade was based on the sizable charges that the company will incur from its exposure to Fannie Mae and Freddie Mac preferred stock as well as the loss taken on the sale of its $750 million CDO portfolio. “Additionally, Sovereign remains exposed to a number of problematic asset portfolios that could result in further heightened credit costs. These charges will negatively affect Sovereign’s capital position. Additionally, as a result of these charges, we expect the holding company will downstream capital to the thrift, decreasing parent company liquidity,” Moody’s said.
although they did replace the CEO and that is good news I think the stock is up in premarket