WaMu the Movie?

Posted by: Chris Palmeri on February 6, 2009

wamu.jpg


A reader named Bryan informed me of this Web site, apparently someone is making a movie of the downfall of Washington Mutual and collecting the stories of former employees and shareholders. It’s a pretty slick looking site.

Bryan also asked if I thought the government takeover of WaMu was a mistake. The bank’s assets exceeded its liabilities, he noted, and private equity firms had recently pumped $7 billion into the firm. Some of those private equity investors believe the government acted too quickly in taking over the bank and wiping out shareholders in the process.

“What “if” the FDIC used WaMu to bail out JP Morgan?” Bryan writes. “The government, for some reason, has anointed JPM the golden child by handing them Bear Stearns and WaMu. Maybe they needed deposits to shore up JPM?”

What do you all think?

Reader Comments

jackson227

February 6, 2009 7:49 PM

I think it is clear that corruption and fraud surrounded the unjust seizure and illegal firesale of Washington Mutual Bank before its supposed "collapse".

Why was Washington Mutual left off of the "no short sell list" when all of the other banks were on it?

Why was Washington Mutual seized just days before it was announced that all banks would have access to capital in the form of tarp?

How could $309 BILLION in assets be sold to JPM for the suspiciously low price of only $1.9 billion?

Why is there no detailed list of seized assets with corresponding values associated with those assets?

There is a schedule 3.1a that is referenced in court documents that is supposed to show all of the assets that were placed in the receivorship of the FDIC,however, it is my firm belief that no such schedule exists. If it did, it would be concrete proof that the FDIC sold over $300 BILLION in assets to JP Morgan for only $1.9 billion. Indymac, which was only valued at $30 billion, was just sold for $14.9 billion. Why is there such a discrepancy between these two sale prices?

After Washington Mutual turned down JP Morgan's low-ball buyout offer of $8/share last year, why was Hank Paulson quoted as telling Washington Mutual that they should have sold when they had the chance?

In addition, it is more than likely that Washington Mutual did not need any TARP funds, as per the OTS FACT SHEET, Washington Mutual was well-capitalized.

http://files.ots.treas.gov/730021.pdf


I feel that if any reasonable person engages in real research, that person would come to an obvious conclusion. That conclusion is that there were several parties, JP Morgan, the FDIC, the OTS, Hank Paulson, and others, who conspired to bring down Washingon Mutual.

I hope that all Americans do their own due diligence and properly research the unjust seizure and illegal firesale of Washington Mutual Bank. The truth needs to be told, and if that means submitting formal requests to the FDIC under the Freedom Of Information Act , then so be it.

America needs to hear the truth !


jackson227

Hans Brost

February 6, 2009 7:52 PM

The OTS/FDIC acted irresponsibly, and possibly illegally.

There is a movement to sue the FDIC/JPM for fraudulent conveyance of WaMu Bank.

This could add a few $Billion to Washington Mutual Inc, which is in Ch11 now as a result of the seizure of it's primary asset, and subsequent sale to JPM for a paltry $1.9B.

We have created a website for Equity Holders to unite: http://www.WaMuEquity.org .

Porter

February 6, 2009 8:01 PM

Excellent Movie.

The shenanigans of the FDIC should be examined by the justice department.

Jack Byrd

February 6, 2009 8:02 PM

I believe this was a HUGE mistake from our trust worthy government. We are talking about what FDIC/OTS did for JPM for pennies on the dollar. They practically gave the 120+ year old company away for FREE!!! All interested parties involved lost everything they had, trust and the capital ideology was wiped out. The next morning the stock market reacted to the news and lost several hundred points, weeks after confidence fell to a all time low, markets were falling 7%+. This was done on a Thursday several day before the bailout plan. There's way too many obvious proof and WHERE THE HELL IS THE NEWS MEDIA WHO"S CONTROLLED BY THE ELITE??

Joe Monroe

February 6, 2009 8:11 PM

I think Brian and perhaps you are on the right track. Just a few months prior to the seizure of Washington Mutual Banks, it was valued at over 300 billion dollars. Sounds like JP Morgan got a pretty sweet deal. A little too sweet perhaps. The law firm representing WMI has filed an administrative action complaint on 30 Dec 2008, against the FDIC for their unncalled for actions. Please keep digging. This is a story in the making and would make a bright reporter quite a name when this thing blows up if you are on the cutting edge. All the best and thanks for the above article.

Mitchel Jack

February 6, 2009 8:13 PM

Why did the government seize WAMU days prior to the tarp being passed and why didn't the government care about the shareholders of wamu like in the case of bear stearns? This wamu seizure will turn out to be huge scangal between Paulson/JPM/OTS/FDIC.

John

February 6, 2009 8:31 PM

Bryan is right. FDIC did this to protect their own insurance fund, which was SUPPOSED to be used to protect bank customers in case something like this happens in the first place. Instead of doing what they were supposed to do, they destroyed a bank just to save their own funds. WTF?

And JPM worked with FDIC to steal what they originally wanted to buy for $8 a share......now they got it for free.

The system has been corrupted.

Garry Denke

February 6, 2009 8:36 PM

harvey.miller@weil.com
marcia.goldstein@weil.com
brian.rosen@weil.com
michael.walsh@weil.com

2 February 2009

The Panetta Institute
http://www.panettainstitute.org
100 Campus centre, Building 86E
California State University, Monterey Bay
Seaside, California 93955

Phone 831-582-4200
Fax 831-582-4082
Email: info@PanettaInstitute.org

Re: The Manhattan Project II

Dear Sylvia,

Could your Husband please release to U.S. Judge James Peck and U.S. Judge Mary Walrath of the Manhattan and Delaware Bankruptcy Courts, respectively, the required Discovery information being withheld by the Department of Justice (DOJ) covering the Lehman Brothers (LEHMQ) and Washington Mutual (WAMUQ) bankruptcies, respectively?

Our newspaper said U.S. Judge Peck of Manhattan slapped his Wife out of New York Southern District Court frustration caused by the DOJ witholding such required Discovery information, and that your Husband releasing LEHMQ and WAMUQ records upon his Confirmation might save U.S. Judge Walrath from Her arrest for Husband slapping too.

I commend U.S. President Obama's choice for Intelligence.

Judge Peck Arrest
http://bankruptcy.law360.com/registrations/user_registration?article_id=85617
Denke Reference
http://forums.seds.org/showthread.php?p=6165

Thank you.

Garry W. Denke, Sr.
Geologist/Geophysicist

Denoco Inc. of Texas
Wildcat Station, P.O. Box 866488
Plano, Texas 75086-6488
Tel: 972-422-8268
Fax: 972-422-7868
Cell: 972-768-4631

GarryDenke@garrydenke.com
http://www.garrydenke.com

GarryDenke@denocoinc.com
http://www.denocoinc.com

rick

February 6, 2009 9:23 PM

I totally agree 100% that FDIC acted to quickly in the take over. I have read all court documents concerning the bk, and done a lot research into it. And IMO this was done intentionally to distroy Washington Mutual. IMO there will be justice in this bk case. I believe this so much that I have bought post-bk common and perferred stocks. IMO this is one of the best risk/reward
gambles I have ever seen.

Nick

February 6, 2009 9:25 PM

Absolutely. The government is beyond corrupted. Paulson is just another goon, like Bush, Senate, House, and the world, for the mob leaders... international bankers.

Iggy do

February 7, 2009 1:14 AM

LOL - Finally someone is reporting the facts....Thanks!!!

Henry Paulson, Sheila Bair, Jamie Dimon, John Reich and who knows who else is included in this plot that toppled Wamu unnecessarly to shore up JPM's books......not to mention that they claimed fraudrulant assets on the recent 8K- What the penalty to their share holder for that?? Thanks

rabih

February 7, 2009 5:01 AM

The government acted too quickly in taking over wamu .

it is big theft for shareholders

Ted Mitchell

February 7, 2009 9:33 AM

My wife have been extremely conservative investors all our working life. After retiring, we saw what we thought was an excellent opportunity to invest in wamu. The chance of a seizure never entered our minds, so we lost a good deal of our retirement money. Like, thousands of others, we know that the seizure was wrong and possibly illegal. We would glady join any mass effort or law suit to try to ge back some of our investment.

Ted Mitchell

Edward Durham

February 7, 2009 10:01 AM

Is this for real? You mean that ... the truth about the illegal activities of the FDIC and JP Morgan could actually be revealed in a movie? I wonder if the movie would go into detail about JP Morgans history of corruption that dates back to the early 1900's? That would be quite a movie

Everyone knows that if JP Morgan goes down the entire country will fail financially ... so yes, the FDIC literally had no choice but to hand JPMorgan the WaMu Bank and Bear Stearns. JP Morgan has the US government in a stanglehold financially, and the government has no choice but to appease them in any way neccessary

Jack Goldman

February 7, 2009 11:02 AM

There are thousands of people who would agree to that "What if" and point their fingers at Sheila Bair (FDIC Chair) and Jamie Dimond of JP Morgan Chase as the chief chefs who cooked up that takeover.
The facts point to some very unusual events including a "Thursday" takeover of WAMU by the FDIC after Treasury Secretary Paulson warned WAMU to take the $8 per share offer from JP Morgan. Don't be surprised if the is a "False Conveyance" lawsuit claim against the FDIC in the next few months.

W3Research

February 7, 2009 11:30 AM

WOW!

Dr. Troy Racki

February 7, 2009 4:30 PM

Things look suspicious, to say the least. Why did the FDIC take 6 months to sell IndyMac, allow a counter offer from Wells Fargo over Citibank for Wachovia, yet seize Washington Mutual and sell it the same day? In fact according to Wikipedia, WaMu was sold at a secret auction to JPM several hours before its actual seizure. Why would the FDIC give time to all their other deals, but show none of the same courtesy to WaMu? Was there no concern for bondholders and shareholders?

It seems like the FDIC has a really hard time determining market value as well. The FDIC asked just $2.2 billion for Wachovia, yet Wells Fargo turned around and paid $15.1 billion. In December the FDIC sold IndyMac sold for $13.9 billion, a company worth about one-tenth of Washington Mutual, according to the New York Times. Yet the FDIC sold Washington Mutual for $1.9 billion. If IndyMac at one tenth size were used as a standard, then Washington Mutual should have been sold for $139 billion, yet the FDIC asked for just 1.3 cents on the dollar. Argus Research Reports pegged WaMu at much lower value of $31 billion days before it was seized, still 15 times greater than what the FDIC asked.

The OTS reports that their reason for seizure was because WaMu was illiquid. However the holding company had $4.4 billion in cash in deposit at the bank. Additionally WaMu had access to another $50 billion from the Federal Reserve Bank of San Francisco. So why did the OTS seize the bank?

It may be hard as well to think as JPM's motives as pure, considering its past actions. Remember the Enron accounting fraud? On July 28, 2003, the SEC alleged that the investment bank J.P. Morgan aided and abetted Enron's manipulation of its reported financial results. J.P. Morgan Chase agreed to pay $135 Million to settle with SEC.

Things certainly are quite concerning indeed. Will the FDIC move and seize Bank of America next? Citibank? It appears like the FDIC certainly can, without good reason, and then sell the assets to whomever they wish for at whatever price they feel like. The goverment then wonders why no one wants to invest in the finacial system any longer.

jonathan

February 7, 2009 7:24 PM

absolutely agree. It suppose to happen only in the communist country but it happended here. My question is "is capitalism on the verge of collapsed?

Grand Fool

February 7, 2009 10:56 PM

Ever since Jamie Diemon crowed about the money he could make by raising the fee structures at wamu banks, I've had several thoughts about this.

Wamu was the bank marketing itself in an anti-bank fashion. Their fees were very low. All banks were in trouble, and might well be in need of raisinig fees but they couldn't do this easily if their depositors could just walk across the street to WAMU. WAMU had attracted a huge number of depositors with their lower fee structures. And where other banks wanted to make ten or twenty billion a year, WAMU seemed to think that a lot less in the way of proffit was OK. In short, they were expanding everywhere and rate busting the whole industry. Wamu marketing tried to make Bankers prudence seem absurd.

The FDIC insured all the banks that might go bust if they couldn't survive the price war and lost too many depositors. They had to make a choice whether to topple the one bank or watch a hundred other banks fall by the way.

WAMU was one of those 100 MPG carbeuretors. It could get you a lot of banking done for very few fees. They were building a lot of customer and investor satisfaction and growing the company very large while showing very modest profits by comparison to other banks of similar size. And they were great GREAT patrons of their community. I think putting a lot of other banks to shame with their generosity.

True or not, interesting angles to play in constructing a good story.

There's a good potential for a sinister Sam type of character with the EXEC they hired away from JPM, who apparently gave all the directives that resulted in all the crazy lending they did,.. to anyone with a pulse.

Sheila Baer acted like she got stood up on a prom date or something. She wouldn't listen to a single fact or address much of anything about the bank. The bank was in terrible shape because "she said so" and nothing would have helped them. Her management of the media was extremely poor.

A good story might also link an attempt to steal the election into the motives for this fiasco.


But we're all waiting and watching because the drama of the whole issue is still unfolding in the court cases that are being generated in this matter. The new administration, the market crash and recovery. MAYBE...

So the story isn't really over.

DH

Joseph R. Roberts

February 9, 2009 9:51 PM

It's very possible. Being a long term stockholder, and listing to WaMu's management that they would correct their position, we believed them. In the future, I guess we can not believe in opinions from above!

Alberto

February 10, 2009 9:46 AM

Did you know that the contract between FDIC and JPM that supports the deal has literally one item missing? … precisely the item 3.1a – schedule of assets. If it would have existed – would have detailed what was conveyed. But it simply doesn’t exist.
...
WMu bank (WMB) was a subsidiary of a holding company (WMI). The entity seized by OTS upon request of FDIC was WMB. Then WMI filled for BK under Ch.11.
Understanding and respecting that the main goal of FDIC is to protect the deposits of banks customers, there may be some serious doubts about the circumstances of this seizure and immediate sell off to JPM.

Shareholders, creditors and investors are supposed to have also some rights and FDIC/OTS are also supposed to act within fairness and at least following their own rules.

As you can guess I have vested interests in this. I am currently a WM shareholder. I got wiped out in Lehman. I was ( I still am) astonished to witness how Wachovia’s value in the eyes of WF was so much bigger than the value accepted by FDIC for it.

The Wachovia’s case should have triggered all alerts and alarms about the consideration that FDIC is paying to shareholders and creditors of the seized institutions. But in the case of WM there are doubts, not just about the price they accepted, but also about the role of FDIC and OTS before, during and after the seizure.
At this point there may be doubts- as per the BK court course - even about if JPM earnings statements - which assumed this deal as neatly closed - should or shouldn’t have included any sort of reserve upon potential contingencies. (Sarbanes-Oxley)
If you are really interested and you send me your email (*) I could share with you:
• A rational of what may be well founded doubts about the case.
• A set of documents, links documents or sites mentioned in the rational
• A set of links with more information about this case.

- * - I cannot attach docs in your web tool, and words without documents are almost empty words.
Cheers and thanks for writing about WM.

Todd

February 10, 2009 12:56 PM

Undoudtedly, WAMU was prematurely taken over by the FDIC. The UST and everyone is talking more about transparency, but there is a risk system called CAMELS used by the FHLB in determining allowable borrowing capacity by member banks. Well, all of sudden on 9/25 the FHLB cut WAMU off from FHLB funding which sent the bank to its knees. How about giving investors more clarity on these ratings. Unbelievable.

RICK

February 10, 2009 8:50 PM

WHERE IS MY COMMENT THAT I POSTED!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

RICK

February 10, 2009 8:50 PM

WHERE IS MY COMMENT THAT I POSTED!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

RICK

February 10, 2009 8:50 PM

WHERE IS MY COMMENT THAT I POSTED!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

RICK

February 10, 2009 8:50 PM

WHERE IS MY COMMENT THAT I POSTED!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Jim

February 18, 2009 12:15 PM

I called the FDIC today and asked them how it is that I have been receiving letters from J.P. Morgan Chase claiming that they own my Washington Mutual Bank loan. I asked why the heck is it that I as well as the rest of the world weren’t privileged in knowing about the auction of WAMU Banks assets. I asked how it was that the FDIC could simultaneously be appointed receiver and sell the assets at five cents on the dollar to J.P. Morgan. Unfortunately, J.P. Morgan can’t put their fingers on my original loan documents and have no proof of purchase. Another funny twist is that Citibank NA serves as trustee for WAMU Bank, a defunct bank representing the interests of J.P. Morgan who claims to own my house.
See you in court!!

Bizreader

March 24, 2009 2:28 PM

"Speed kills!" "Haste makes waste." Right?

These may be the lessons of this era of change in the U.S. financial sector. We may be relearning these age-old adages.

When the largest budget in history is passed locking in future generations' income without the budget being read by the citizens' representatives and the FDIC, The Fed, The Treasury and the OTS take over the Washington Mutual with a few phone calls and then fumble the ball royally, it's time to confess that old habits die hard. Greed was the style and mode of the day and perspective was lost on this matter years ago. Now, at the end of the Bush "administration" a big botched seizure, or transfer, is yet to be cleaned up. Let's use this opportunity to come clean in the public forum.

wldgrdnr

March 31, 2009 7:06 PM

There are SO many questionable issues regarding the seizure AND the sale of Washington Mutual (not to mention the SEC turning a blind eye to naked short selling) There is sooooo much information that shows this was clearly incompetence at its best, or possibly corruption. Get the facts, with links to government documents at www.wamutruth.com and www.wamustory.com

The American People are being lied to by the FDIC, and they are trying to shovel a lot of "stuff" to influence public opinion...but the FDIC is spreading out and out lies, as is JPMorgan.

Get the TRUTH

You owe it to yourself.

www.wamutruth.com

Hugh Jazz

April 27, 2009 12:43 PM

WaMu the movie? It's gonns be bad and contain lots of fat chicks. Also, I believe the FDIC acted harshly when it demanded the return of Kerry Killinger's whig.

fcuked up siht

December 2, 2009 8:55 PM

fcuk the government illegal bs seizure, if they were afraid of the run on wamu they could have bailed them out faster. this was a massive signal to pass tarp and the unfortunate victim was wamu. rip wamu, you were done wrong.

Post a comment

 

About

BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.

BW Mall - Sponsored Links

Buy a link now!