Not affiliated with WaMu, or JPMorgan Chase, not an organization, just a burned shareholder seeking compensation.
One purpose of this Chronology is to show what a biased injustice WaMu and WaMu investors received, by showing what types of deals all the other major banks received. On the Comparing Bank Seizures page it shows how irregular and anomalous a bank seizure WaMu was. The difference in treatment is alarming, unfair, unjust, and needs to be corrected by compensation to the investors.
On this page you will see trillions of US dollars spent supporting pet banks and industries of the US Government, while our banka non grata without reason, WaMu was stabbed in the back and then quickly disposed of, to be ignored and forgotten. To get a broad overview of the rescue operations for these pet banks and industries visit Subsidy Scope and Open the Government.
March 2008
Sunday March 16, 2008
JP Morgan buys Bear Stearns, a large investment bank, in a deal arranged by the Federal Reserve for $2.00 a share. The Fed will guarantee $30 billion of Bear Stearns less liquid assets. Source: JP Morgan Pays $2 a Share for Bear Stearns.
Monday March 24, 2008
JP Morgan to prevent shareholder lawsuits now agrees instead to pay $10.00 a share for Bear Stearns. The Fed will now guarantee $29 billion of Bear Stearns less liquid assets. Source: Seeking Fast Deal, JPMorgan Quintuples Bear Stearns Bid.
September 2008
Thursday September 4, 2008
At about this date the FDIC calls JPMorgan Chase and tells them they are carefully monitoring WaMu and that a seizure of its assets was likely, and that the FDIC would want to immediately auction off WaMu’s assets if a seizure was necessary. Source: How J.P. Morgan Raised $11.5 Billion in 24 Hours. Likely the FDIC called the other big banks that particpated in the final auction as well.
Sunday September 7, 2008
Fannie Mae and Freddie Mac are seized by the US Treasury and put into conservatorship overseen by the Federal Housing Finance Agency, it is a $200 Billion bailout. Source: U.S. seizes Fannie and Freddie.
Monday September 8, 2008
Wamu announces they have chosen Alan Fishman as the new CEO of WaMu, and that they have negotiated a Memorandum of Understanding concerning aspects of the bank’s operations with the OTS. It concludes with this sentence. The business plan will not require the company to raise capital, increase liquidity or make changes to the products and services it provides to customers. Sources: WaMu replaces CEO, signs agreement with regulator, and WaMu in MOU with Office of Thrift Supervision.
Thursday September 11, 2008
WaMu provides an Update on Expectations for Third Quarter Performance and notes the company continues to maintain a strong liquidity position with approximately $50 billion of liquidity from reliable funding sources. The company's tier 1 leverage and total risk-based capital ratios at June 30, 2008 were 7.76%, and 13.93%, respectively, which were significantly above the regulatory requirements for well capitalized institutions. The company expects both ratios to remain significantly above the levels for well-capitalized institutions at the end of the third quarter. Sources: WaMu Provides Update on Expectations for Third Quarter Performance.
Friday September 12, 2008
Goldman Sachs analyst Brian Foran upgraded WaMu stock to “Neutral” from “Sell,” saying the company may have enough cash to avoid having to raise capital, possibly by selling shares. However, that would dilute the value of existing shares. “Capital and reserves seem to be stable in the quarter, thus, even though losses continue to deliver body blows to the bank, the equity base is absorbing the pain and another capital raise might be avoidable,” Foran wrote in a note to investors.
Keefe, Bruyette & Woods analyst Frederick Cannon also said the news made him “feel modestly better” about the company because the results were slightly better than his expectations. Source: Washington Mutual shares waver, Goldman upgrades.
Sunday September 14, 2008
Bank of America buys out Merrill Lynch Investment Bank in a $50 Billion all stock transaction. Source: Weekend Merger Struck With Bank of America.
Standard & Poors issues a downgrade of some of WaMu's bonds, but made this positive statement about their liquidity. WaMu's overall liquidity profile at the bank and the holding company is positioned to withstand this weak credit cycle through the end of 2010. During the past year, WaMu has conservatively and prudently managed its holding company liquidity position. It faces minimal debt maturities through the end of 2009. WaMu reaffirmed that its outstanding debt is not subject to rating triggers or other terms that would cause acceleration. Source: S&P: Washington Mutual Inc. Downgraded To 'BB-/B' From 'BBB-/A-3'; Outlook Negative.
JPMorgan Chase gives the now already in Chapter 11 Lehman Bros. $138 billion dollars to settle open derivative trades and then the same day the Federal Reserve pays JPMorgan Chase $138 billion dollars for giving the payments to Lehman Bros. Suspicion is the trades were between JPMorgan Chase and Lehman Bros. to begin with, and without payment JPMorgan Chase would have collapsed, and taken down the US economy with it. Sources: JPMorgan Gave Lehman $138 Billion After Bankruptcy & Lehman’s Demise Was Most Assuredly All-About J.P. Morgan.
Wednesday September 17, 2008
WaMu announces it is for sale and that they have hired Goldman Sachs to be their broker. Source: WaMu for sale.
Thursday September 18, 2008
Alan Fishman WaMu's new CEO releases a letter to shareholders and says Capital ratios describe the financial strength of a bank. Our ratios continue to be well in excess of the levels that government regulators require of “well capitalized” institutions. We also have an ample supply of funds on hand to meet your needs and the needs of our other customers and our day-to-day operations. Source: To Our Valued Customers (pdf).
Sunday September 21, 2008
Goldman Sachs and Morgan Stanley, the last two independent investment banks in America, convert into bank holding companies. Source: Goldman, Morgan to become holding companies.
Thursday September 25, 2008
The Washington Mutual Bank, the sixth largest bank in America, is seized by the OTS at 6:15pm PDT in Seattle, for "lack of liquidity". It is the largest bank seizure in United States history. (Source: Government Seizes WaMu and Sells Some Assets). With the announcement of the seizure is the news that JPMorgan Chase has purchased all of the assets and deposits of the bank for $1.9Billion. About sixty thousand shareholders are wiped out of about $30 Billion. At about 6:15pm edt JPMorgan Chase announced a nightime conference call for 9:15pm edt during which they confirm this. (Source: JPMorgan Chase Announces Investor Conference Call). The OTS affirms WaMu was well capitalized when put into receivership. (Source: OTS Fact Sheet on Washington Mutual Bank (pdf)). With this heads up signal that the Government does not have the composure to mitagate a financial disaster, the markets begin to implode.
Friday September 26, 2008
The $700 Billion bailout after a week of debate goes up to Congress for the vote - it does not pass, (dead link). My memory was that this was a vote. In searching for a news story to replace the dead link I could not find one concerning a vote. It had definitely been an anticipated day to vote earlier in the week. The news stories refer to it as a day of huge disagreements on the bailout details.
Washington Mutual Inc the parent holding company of the WaMu bank, stripped of its primary asset, files for Chapter 11 bankruptcy reorganization. Source: WaMu Files for Bankruptcy Following FDIC Seizure.
John Reich Director of the OTS speculated there would have been more bidders for WaMu had potential buyers not been so distracted by a contested $700 billion government plan aimed at stabilizing the financial sector by purchasing bad mortgage assets from financial institutions. The future of that plan is still unclear. "Everybody has had an eye on that at the same time they were looking at considering making a bid on WaMu," Reich said. Source: Withdrawals by customers ultimately sank WaMu: OTS.
Monday September 29, 2008
Under verbal threat of seizure from the FDIC, Wachovia Bank, the fourth largest bank in America, sells itself to Citigroup for $2.1Billion. Shareholders shares are included in the plan and retain a current market value. Source: Citigroup Inc. to Acquire Banking Operations of Wachovia
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Tuesday September 30, 2008
The IRS releases N-2008-83: Application of section 382(h) to banks, (382(h).pdf). This notice removes the damages FAS 157 the mark to the market rule does to bank's balance sheets upon merging with a bank with bad loans, (FAS 157.pdf).
October 2008
Wednesday October 1st 2008
The $700 billion bailout plan goes to vote before Congress for the third time - it passes. Source: On Passage of the Bill HR 1424 (As Amended).
Friday October 3, 2008
The bailout plan is signed by President Bush and made law. Source: Historic Bailout Passes As Economy Slips Further. The bailout plan receives the legal name of the Emergency Economic Stabiliztion Act of 2008, or EESA 2008.
Wells Fargo Bank makes Wachovia Bank an offer for $15.4 billion, far superior to the $2.1 billion offer they they were forced into with Citigroup by the FDIC, Wachovia accepts, and Wachovia shareholders shares retain a good current market value. This new deal requires no government assistance or taxpayer money. Source: Wells Fargo, Wachovia Agree to Merge.
Tuesday October 14, 2008
The Government puts the first $250 billion from EESA toward capital injections into the banks, with $125 billion given to nine large banks, Bank of America $15B, Bank of New York $3B, Citigroup $25B, Goldman Sachs $10B, JPMorgan Chase $25B, Merrill Lynch $10B, Morgan Stanley $10B, State Street Corp $2B and Wells Fargo $25B. The $10B for Merrill Lynch will wait until its purchase by Bank of America is completed. Sources: U.S. Forces Nine Major Banks To Accept Partial Nationalization and Timeline: Financial crisis since October. The dollar spit numbers included here came from an article now removed from the internet.
November 2008
Monday November 10, 2008
The Government scraps its two previous bailouts of AIG and goes with one new bailout for AIG, at a cool $150 billion. Source: AIG Gets Expanded Bailout, Posts $24.5 Billion Loss.
Monday November 24, 2008
The Government bails out Citibank again, with yet another $20 billion cash infusion and guarantees on $306 billion of Citibanks debt. Source: Citigroup gets massive U.S. government bailout.
Tuesday November 25, 2008
The Federal Reserve announces it will allot $800 billion toward bailing out the financial markets on mortgage, credit card, college and auto lending. Sources: Fed's $800 billion package aims to unlock lending. Total bailouts are now at $7.8 trillion. Source: U.S. Details $800 Billion Loan Plans. Yet they have still forgotten to compensate everyone in WaMu, Doh!
December 2008
Friday December 5, 2008
The Federal Reserve buys $5 billion of Fannie Mae (FNM), Freddie Mac (FRE) and Federal Home Loan Bank (FHLB) corporate debt, in the open market. Source: Fed buys $5 billion of Fannie, Freddie, FHLB debt.
Thursday December 11, 2008
The Federal Reserve announces it will buy up to an additional $100 billion in Fannie Mae, Freddie Mac and FHLB debt on Friday Dec 12th, this on top of the $5 billion of debt it bought on Friday Dec 5th. Source: Fed to make 2nd agency debt purchase Friday.
Bernard Madoff is arrested and charged with securities fraud in the world's largest ever Ponzi scheme. Madoff confesses the losses may amount to the $50 billion range. Source: Madoff arrested in alleged Ponzi scheme.
Monday December 22, 2008
OTS West Region Director Darrel W. Dochow who supervised Washington Mutual, Countrywide, IndyMac and Downey Savings and Loan, all banks that have recently been seized, or recently sold to avoid seizure, and who was demoted in the early 1990s after he delayed and impeded proper regulation of the failed Lincoln Savings and Loan in the 1980's Savings and Loan crisis, is demoted again in part for approving of IndyMac backdating a large cash infusion
two months before the FDIC decided the bank needed to be seized. Source: Regulator Let IndyMac Bank Falsify Report.
Monday December 29, 2008
The Treasury announces they will purchase a $5 billion stake in GMAC using the bailout funds. They will also provide $1 billion to GM Corp to purchase GMAC stock. All this money is in addition to the money promised on December 19th, 2008. Source: GMAC Gets $6 Billion From Treasury to Revive Lending.
Tuesday January 13, 2009
Citigroup spins off its Smith Barney brokerage subsidary by merging it with Morgan Stanley to form Morgan Stanley Smith Barney, for which Citigroup receives a $2.7 billion fee and becomes the minor shareholder at 49%. Source: Citigroup, Morgan Stanley to merge brokerages. Morgan is expected to acquire full control after five years.
Thursday January 15, 2009
JP Morgan Chase announces earnings. Although smaller than hoped for they are in the black and benefits from the aquisition of WaMu are credited for keeping them above water. Source: JPMorgan posts profit, but 'disappointing' one.
Citigroup announces quarterly earnings, and reports a loss of $8.29 billion. Citigroup also announces they will split the company to form two separate companies. One company Citicorp, will be the the retail and commercial bank plus the investment bank. The other company Citi Holdings will manage the brokerage, retail assets, consumer finance and the pool of risky assets, aka all the toxic debt. Source: Citigroup loses $8.3 billion, to split in two. So why wasn't WaMu offered this arrangement, instead of being seized and destroyed?
Tuesday January 27 2009
Rep. Paul Kanjorski D-PA, Chair of the House Capital Markets Subcommittee, on C-SPAN’s Washington Journal informs us that on Thursday September 18, 2008 US bank money market accounts suffered a system wide electronic bank run that removed $550 billion in the first two hours of the morning. WaMu was not alone in low liquidity. He starts explaining at about 2:09 into this C-Span video: CSPAN Rep Paul Kanjorski Reviews the Bailout Situation.
Wednesday February 18, 2009
President Obama commits up to $275 billion to help stop home foreclosures, $75 billion for new lending and $200 billion to shore up Fannie Mae and Freddie Mac. Source: Obama unveils plan to tackle housing crisis.
March 2009
Tuesday March 3, 2009
AIG reports a quarterly loss of $61.7 billion. The US Gov commits another $30 billion to bailing out AIG. AIG does not have to pay dividends on securities owned by the US Gov. Total bailouts for AIG alone now total $180 billion. Source: Bernanke Says Insurer AIG Operated Like a Hedge Fund.
Wednesday March 18, 2009
The Federal Reserve announces it will add another $1 trillion in aid to the US financial system by purchasing Treasury bonds and mortgage securities. Source: Fed Plans to Inject Another $1 Trillion to Aid the Economy.
The Chronology leaves off here. Events related to the WaMu seizure will go on for a decade and chronicling each one does not really serve a purpose. Still some events and news stories are so remarkable that they deserve mention, and some of these occur below.
