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WaMu Deathwatch

Washington Mutual’s largest single shareholder, private-equity firm TPG, today removed a potential roadblock to a potential acquisition of the ailing thrift.

TPG, which led a consortium that infused $7.2 billion into Seattle-based WaMu in April, agreed to waive a provision in its investment agreement that would have forced WaMu to pay hundreds of millions of dollars in the event of a sale at today’s rock-bottom stock price.

The development comes as federal regulators reportedly are shopping around WaMu, which has been hobbled by its deeply troubled mortgage business, to potential buyers.

wamu_deathwatch.jpg

Washington Mutual’s stock has dropped from over $40 a share last summer to $2.11 at the time of this post. So now the question isn’t whether WaMu will implode, but which bank will buy this dud?

Comments (20)

1

I don't remember who said it first, but it looks like Bank of America will really be the only bank left in America. Thank god for Seattle Telco Credit Union (Watermark CU).

Posted by Banna | September 17, 2008 1:14 PM
2

NYT Dealbook: confirms WAMU has had Goldman Sachs working to auction themselves off last couple days. Among bidders Wells Fargo, JPM Chase and HSBC.

Posted by tomasyalba | September 17, 2008 1:26 PM
3

Forgot link, sorry:
http://dealbook.blogs.nytimes.com/2008/09/17/washington-mutual-begins-auction-to-sell-itself/

Posted by tomasyalba | September 17, 2008 1:27 PM
4

God, I HATE Bank of America!!!!

Posted by Amelia | September 17, 2008 1:29 PM
5

JM Morgan Chase

Posted by Bellevue Ave | September 17, 2008 1:29 PM
6

@5: i hope.

BECU, i'm coming as soon as possible.

Posted by max solomon | September 17, 2008 1:36 PM
7

lmao, "JM" Morgan? WHAT A FUCKING TYPO.

Posted by Bellevue Ave | September 17, 2008 1:43 PM
8

the owned real estate seems to be the only thing of value left... nice big downtown seattle skyline building, some nice branch locations, the atms are still work with cash in them, right? Yeah, a real banking asset, WAMU is right now.

Posted by Phenics | September 17, 2008 1:49 PM
9

Chase makes the most sense. With the exception of NY, WaMu's retail presence is strong in markets where Chase is weak and wants to expand into (or wanted to a year ago). Wells Fargo has a strong presence in most markets WaMu is in, so while the actual deposit base is attractive to them, the retail locations themselves aren't so interesting to them.

Posted by Chase makes the most sense | September 17, 2008 1:50 PM
10

I wonder if my friends still think I am foolish for not pouring money into a 401K plan or investment properties.

A good rule of thumb I got from Dad: If someone really wants to "manage" your money, what they really want to do is steal it.

(From "Everybody Hates Chris": the local hood that always says to Chris, "Lemme hold a dollar".)

Posted by Sir Vic | September 17, 2008 2:07 PM
11

Sir Vic, you are foolish for not utilizing a 401(k) plan. You know you can manage those yourself right?

Posted by Bellevue Ave | September 17, 2008 2:13 PM
12

To expand on that;

you could put your 401(k) money in municipal bonds, earn a comparable rate to CDs, and reap current tax benefits and long term tax benefits. with a standard CD you don't get that.

Posted by Bellevue Ave | September 17, 2008 2:15 PM
13

Not to mention that many employers will match 401(k) contributions; you should at the least put enough into your 401(k) to receive the maximum of whatever they're offering.

When you leave your employer, it isn't very hard to "roll over" your 401(k) into an IRA with no penalty. I've had great experiences with Fidelity. And with this IRA, you can distribute the funds however you chose - from individual stocks to index funds to mutual funds to bonds.

It's really not very difficult. And with China poisoning all the pet-food these days, it'll be much harder to make ends meet in this downturn.

Posted by John Galt | September 17, 2008 2:46 PM
14

If we believe Golob's posts here, our best bet is to invest in bags of flour, barrels of oil, and shotguns.

Posted by tsm | September 17, 2008 2:52 PM
15

Bellevue Ave:
Thanks for the info. Hopefully this will help others that have employers that do matching contributions (I don't) and have time to sift through all the BS that "financial advisors" throw at people looking to invest (not me).

Are you implying that if I didn't manage a 401k myself, I would have lost money in the past few weeks allowing "professional money managers" to do it for me?

(Yes, I am skeptical of the financial services industry. Mostly because I provide software for these folks, and have found them to be much stupider than you would expect. Most got into the biz because of "daddy's money".)

Posted by Sir Vic | September 17, 2008 3:28 PM
16

it's possible that you would have lost money. i dont trust investment management myself but thats based on statistical analysis of money managers. they don't outperform index funds most of the time.

also, dollar cost averaging(buy the same dollar amount of an index fund at standard intervals) is the only way to have a passive investment approach works and gains worth over time.

Posted by Bellevue Ave | September 17, 2008 3:38 PM
17

Why worry? You now own 79.9 % of AIG; and you have the number one payment position in unsecured debt payemnts with Fannie Mae and Freddie Mac!

Posted by chk_it | September 17, 2008 4:00 PM
18

Hey Dominic -

Alot of your neighbors have devoted much of their working lives to building the value of that "dud", only to see it pissed away in a flash by KKK and the Wall St. mercenaries he became so enamored with over the last few years. No need to dance on any graves.

Posted by Kerry Sux | September 17, 2008 4:52 PM
19

Sorry, @ 18. Nothing personal. I also have a bunch of friends who work at Microsoft, but I don't hesitate to make fun of Microsoft's shitty programs. Have I ever mentioned my affection for Airbus?

Posted by Dominic Holden | September 17, 2008 5:35 PM
20

@18 We feel your pain. After Merrill Lynch announced its sale to Bank of America, one of the regional stockbrokers said that 100 guys had flown the company into a mountain. He was right.

Crappy economic times present an excellent opportunity for everyone to reexamine a decision to work for a large corporation and ponder instead whether they could derive more meaning and pleasure from a life dedicated to other pursuits.

Posted by kk | September 17, 2008 9:53 PM

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