Washington Mutual is no more.
Yesterday the Fedral Deposit Insurance Corp (FDIC) seized Washington Mutual’s assets and sold them to JP Morgan. The cost of JP Morgan’s acquisition is just under $2 Billion.
This is now the biggest banking failure in the nation’s history!
Washington Mutual had been hurting for a while after gambling on the housing market. JP Morgan tried to acquire WaMu back in April for about $7-$8 a share but were re-buffed in favor of a $7 billion equity stake from the firm TPG. The value of TPG’s equity is basically worthless now and WaMu stock is around $0.12 cents a share (worthless too).
JP Morgan becomes the nation’s largest depository with over $1 trillion in deposits.
Depositors need not worry about their accounts. According to FDIC Chairman Sheila Bair “There will be no interruption in services and bank customers should expect business as usual come Friday morning.”
These are some interesting times aren’t they?
Sources
Ahead of the Bell: Washington Mutual/JP Morgan
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