Breaking: Gov't Brokered Deal For JPM & WaMu
A: Waiting for details, as this news breaks. Can't find any release online yet, as I saw it past the CNBC screen. Apparently the government has pulled a Bear Stearns like transaction and helped broker a deal for JP Morgan to buy WaMu's deposits. Details to come.
The financial sector is changing very quickly and it seems Bank of America & JP Morgan are now the top two sharks as we head into the new world! Strange how eerily quiet things have been around Citigroup? Their balance sheet was a mess and they haven't announced write-downs in a while. The treasury recapitalization plan, if/when it goes through, I'm sure will rid many toxic loans from Citi's books, but it's clear that Citigroup is in no position to be the big shark that swallows the little guys in this wall street restructuring due to their overleveraged, toxic holdings that are restricting the company's buying power.
In other news, the latest is that the Treasury Rescue Talks have "Cratered"!
Posted by brenda
Thu Sep 25th, 2008 09:17 PM
Noah,
I have been wondering about the haste in this bailout deal (I know, spreads are awful, money is nowhere to be found, but many of the immediate problems were "taken care of" over the last couple of weeks, time is of the essence, but this seemed extreme). Right now, prior to the need for banks to find more money for their end-of-the-year transactions, what really screams problem? Well, WaMu was obvious, and one has to wonder whether the FDIC had any grounds for allowing them to continue to do business as usual for this long. Wachovia is another bomb, just not as close to detonating. The real question is Citi. Does PaulBen need this deal for some reason unknown to us mere mortals because of Citi? Not usually in the conspiracy theorist vein, but as you've also noticed, the lack of info on Citi reeks of something.
Posted by Richard Soderberg
Fri Sep 26th, 2008 12:43 AM
The Big Picture published a PDF of the OTC statement.
http://bigpicture.typepad.com/comments/2008/09/ots-puts-washin.html
Posted by Noah
Fri Sep 26th, 2008 06:56 AM
WaMu in receivership. Markets set to tank. I am guessing a fed cut is very very close at this stage.