Not affiliated with WaMu, or JPMorgan Chase, not an organization, just a burned shareholder seeking compensation.
Washington Mutual Inc:
The symbol that most of us purchased the common shares of WaMu under, WM, is gone due to the Chapter 11 bankruptcy reorganization.
WAMUQ is the new symbol for the WaMu common shares, and it is now trading on the pink sheets.
There are also preferred shares,WAMPQ, WAMKQ and WAHUQ. They also trade on the pink sheets. Below are links to the quotes and the message boards for all four securities on the two most popular finance message boards. The WAMUQ boards are the most popular.
The Ghost Message Board - A board started to get away from bashers and bans on the Yahoo Board. Now the board of choice for many active posters. This board has currently closed its membership and is viewable to members only.
The WaMu Discussions Board - This was a popular board in the first year after the seizure. It has slowed down since then. Many of the threads from the those early months after the seizure have been stickied and serve as a good time capsule of how things were happening at the time. The board has a handful of active posters who are keeping it alive.
Websites: WaMu Equity Organization - (wldgrdnr) Seeking to protect the value of our shares. Washington Mutual Equity Group - (zardiw) A group of shareholders who have joined together to preserve equity value. The WaMu Story - (started by wldgrdnr & zardiw, now run by zardiw), do not confuse with WaMued - The Story.
Squidoo: - WaMu Lens (zardiw) Ghost of WaMu - (ghostofreagan) following WaMu through the courts. Excellent web site posting important documents from the court cases. Accesses PACER and has documents for the court case against the FDIC in US District court.
Legalities:
Where to view and download WaMu legal documents:
Kurtzman Carson Consultants KCC WaMu, use the menu in the left margin. This site has documents concerning only the bankruptcy.
Also for eight cents a page documents can be viewed from Pacer. Documents concerning any of the WaMu court cases are available from Pacer.
The Fifth Amendment to the US Constitution (pdf). The FDIC's early resolution seizure of WaMu was to save themselves from the potential of having to pay out on depositor insurance of WaMu accounts, as they had foiled and fumbled WaMu's merger process. The FDIC is a public government agency that seized private property to save themselves, and the public, of possible expenses they faciltated and were obligated to pay, but did not want to pay. This is a violation of the fifth amendment of the US Constitution.
WaMu’s liquidity problem is debatable. On Sept 11, 2008 WaMu announced it had $50 billion dollars in liquidity. On September 25th it was seized for a bank "run" totaling $16.9 billion. Was the seizure necessary when they still had $33 billion dollars in liquidity and the bailout meetings were already well underway? Wouldn’t WaMu have survived without a problem throughout the bailout meetings and after the bailout terms were known, been enough of a known quantity to complete a merger. The Federal Reserve has systems to keep banks with short term liquidity problems whole, they are called the Federal Funds and the Discount Window. Couldn't the FDIC make an announcement that it would not let depositors at WaMu lose funds while the bailout was being put together and implimented?
The FDIC reserves were at the legal limit allowed and hence the FDIC did not collect premiums from the banks for the ten years from 1996-2006. This was when the economy was strong and few banks failed. Now as the economy weakens they have very quickly run out of money. In a move to avert their own liquidity problems the FDIC was desperate to have WaMu seized as fast as possible. A seizure protects the FDIC from exhausting its liquidity, and there was a slim chance that if things went horribly wrong for WaMu before it could merge itself, the FDIC would be put in the position of having to insure its depositors. FDIC Cuts Commercial Bank Premiums (11/15/1995) Deposit Plan Will Cost Banks More (10/02/08)
The Law that Sheila Bair used to justify the seizure of the WaMu Bank and forcing the parent company WaMu Inc. into bankruptcy is the Federal Deposit Insurance Corporation Improvement Act of 1991 (FDICIA). It was passed in the 102nd Congress. This is a link to the law,
FDICIA 1991, scroll down to SEC. 141. LEAST-COST RESOLUTION. This is the section of the law she quoted for her choice of methodology. Sub section 4BIII says they have to retain the documentation for not less than five years. I did a FOIA request for these documents and received this partial reply WaMu Case Memorandum (pdf). Section 141/4GI says the least cost resolution should not be used if it will cause systemic risk, like triggering a recession. etc. SEC. 143. EARLY RESOLUTION is the part which allows them to do a preemptive seizure, as was done in WaMu's case.
Here is one of the FDIC's regulations, designed to enrich themselves, clearly violated with the WaMu auction.
FDIC Law, Regulations, Related Acts:(1);
1000 - Federal Deposit Insurance Act:(2);
Use next page to get to this page:[1000-1200 (3)];
See under (13)(E)(i,ii,iii):
(13) ADDITIONAL RIGHTS AND DUTIES.--
(E) DISPOSITION OF ASSETS.--In exercising any right, power, privilege, or authority as conservator or receiver in connection with any sale or disposition of assets of any insured depository institution for which the Corporation has been appointed conservator or receiver, including any sale or disposition of assets acquired by the Corporation under section 13(d)(1), the Corporation shall conduct its operations in a manner which--
(i) maximizes the net present value return from the sale or disposition of such assets;
(ii) minimizes the amount of any loss realized in the resolution of cases;
(iii) ensures adequate competition and fair and consistent treatment of offerors;
Tax and Related Matters:
The bailout was made law Oct 3 2008, and is now known as the Emergency Economic Stabilization Act of 2008 (EESA) Complete text of the EESA (pdf) Summery of the EESA (pdf) further EESA (pdfs)
TARP expenditures as of February 20 2009, pdf.link.
TPG Capital - the largest WaMu shareholder. Though WaMu was only five percent of their portfolio. Originally 822,857 WaMu common shares at $8.75 a share, and Series S and Series T Preferred Stock, for a total investment of two billion dollars (link- top of pg 13). The Series S and Series T Preferred Stock was automatically converted into 227.7 million shares of WaMu common stock on June 30, 2008. TPG reduced their position along the way. They say the seizure of WaMu caused them a loss of $1.3 billion dollars.
JPMorgan Chase: JPMorgan Chase & Co. JPM WaMu Analyst Presentation (pdf)
JPM Chase conference call on the WaMu purchase, given 9:15pm EST Thurs. 09/25/08 - this link brings up an autoplay audio - Conference Call.
To download a copy of the conference call to play at your convenience, right click this link Conf Call and choose Save Target as.... It is a 20MB windows media audio file, about a five minute download over a high speed internet connection. If you just want the body of the call without the question and answer period use this link first half, if you just want the question and answer portion use this link Q&A.
JPMorgan Chase is the biggest player in the Derivatives and Credit Default Swaps market. They are also the most over leveraged in this area. It is important to note that the financial crisis was not caused by subprime loans, it was caused by side bets, CDO's or Credit Default Swaps, a derivative, contracted on packaged bundles of subprime mortgages. These contractual obligations can be leveraged and also written against each other, over and over, and their combined dollar values in the banks portfolios are immense. They were highly profitable in good times, but as subprime mortgages failed the defaults often cause the much larger amounts of all associated side bet contracts to fail as well, and these domino through the system. This is what caused the financial crisis, banks, investment banks and insurance companies being unable to make good on their credit default obligations. JPMorgan is the primary originator of this market and the biggest player in it. Lehman Bros and Bear Stearns were its primary competitors. AIG was also a big player, as were many hedge funds. WaMu did not deal in derivatives. The JPM Derivatives Monster (09/07/01) JPM Derivatives Monster Grows (01/04/02) The JPMorgan Guide to Credit Derivatives (pdf)
Documentaries on the financial crisis in general, not WaMu specific:
1. CNBC House of Cards The Definitive Look At The Origins Of Today's Global Economic Crisis (1:31:10).
2. PBS Inside the Meltdown Investigating how the economy went so bad so fast and what Bernanke and Paulson didn't see, couldn't stop and weren't able to fix (56:23).
3. Boom, Bust & BLAME The Inside Story of America's Economic Crisis. CNBC's special web series on the crisis, and includes short videos.
4. PBS Frontline: The Warning. Long before the meltdown, one woman tried to warn about a threat to the financial system (54:59). A documentary about how the unregulated derivatives market lead to the financial crisis. JPMC is the leading derivatives market participant. Sheila Bair advocated that hedge funds, many whom are major derivative players, not be regulated.
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