If this stock was not a financial stock... protected by no shorting... a prayer for bailout... If this stock was in say technology or pharmies... posting a decline from $52 to $8 ripe for takeover. What would your play be? How would you play this now knowing the financial markets are being manipulated? The takeover will likely be another FDIC seizure?
I'm with jd7419. FDIC doesn't steal banks. FDIC gets appointed as receiver. With WAMU they just already had a deal worked out so the FDIC just had to broker the deal so to speak. As for the way f the future, only when a bank needs to. It's not the way of the future except that there are a few strong banks and a lot of banks that may not make it because of this current environment (and past mistakes) AND this so called "bail out" plan that might allow many of them to cut some of this sub-prime crap loose. It'll make sense to sell if like WB, you have a great bank, but have a bunch of bad crap too. If the Governments "plan" will let them dump enough bad crap, they'll be able to break up into 2 banks, or be a great opportunity for someone to come in and buy them.....not kill and rip them apart like WAMU. There's a lot of upside to WB but I think it's like walking on the edge of a cliff. If the stars align wrong and the wind blows just right, it could be bad. But the chances are pretty slim. I'd like to see them spike up to $24 again on Monday. I'm in again, this time much lower and I need to tend to the WAMU wounds.....
I think a lot of what's happening is people are freaked after what happened to WAMU the night before. The announcement that WB was in talks with a few suitors caused a spike, but that turned to a drop. It's like what happened Thursday night. People are gun shy. It's scary as shit but we still stick out neck out hoping all the good signs are the right signs.
This today from Bloomberg. http://www.bloomberg.com/apps/news?pid=20601087&sid=as9sF0RrMSTg&refer=home Wachovia Suitors May Delay Bidding After Dimon's Deal for WaMu By David Mildenberg Sept. 27 (Bloomberg) -- Wachovia Corp.'s suitors may use a template honed by JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon last week: Wait to see whether regulators will seize the bank, then buy the best assets and let the government sort out the rest, according to analysts. Citigroup Inc., Wells Fargo & Co. and Banco Santander SA are in talks with Wachovia, the Wall Street Journal reported yesterday. They're part of the same group that passed on a chance to buy Washington Mutual Inc., which the U.S. closed two days ago, leaving JPMorgan to buy WaMu for $1.9 billion, a fraction of its previous offer in March. The bidders may try that tactic again at Charlotte, North Carolina-based Wachovia following its 27 percent plunge in New York trading yesterday, according to analysts at Goldman Sachs Group Inc. and Egan-Jones Ratings Co. They may get help from regulators, who said the U.S. benefited from seizing and selling WaMu because the Federal Deposit Insurance Corp. didn't have to tap its $45 billion insurance fund. ``WaMu's takeover has proven that there's an easy way, if the FDIC is involved,'' said Sean Egan, president of Egan-Jones in Haverford, Pennsylvania. ``You kick the hell out of the equity holders and bondholders. That may be the new model for bank takeovers.'' Christina Pretto, a spokeswoman for New York-based Citigroup, declined to comment on the Journal's report, as did Santander's Peter Greiff, spokesman for the Spanish bank, and Wells Fargo's Julia Tunis Bernard in San Francisco. Wachovia's Christy Phillips Brown wouldn't comment on the news accounts or on analysts' reports. Limited Risk After WaMu's failure -- the biggest in U.S. history -- Dimon said in an interview that the New York-based bank gained ``a fabulous franchise'' while limiting the risk. ``We got this at a price that protects us, where if we were wrong, it still protects us,'' said Dimon, 52. Wachovia has more resources to draw upon than WaMu did, including its market capitalization of $21.6 billion and assets that rank sixth among U.S. lenders. CEO Robert Steel, 57, the former Treasury official hired this summer to replace Kennedy Thompson, told employees in an e-mail yesterday that Wachovia was ``strong and performing well.'' The bank is more diversified than WaMu, owning the third-biggest U.S. brokerage, plus units in wealth management and corporate and commercial banking, he wrote. Credit Ratings The bank also has better credit than WaMu, which was cut to junk levels by credit rating firms before its collapse. Wachovia carries investment-grade ratings from Moody's Investors Service, Standard & Poor's Corp. and Fitch Ratings. Moody's and Fitch have a negative outlook, indicating a possible downgrade. Wachovia dropped $3.70 to $10 in New York Stock Exchange composite trading yesterday and lost $1.50 more in extended hours. Yields on Wachovia's bonds soared to 24 percent, from 7.5 percent on Sept. 5, an indication that investors are concerned about default. Analysts questioned Wachovia's ability to stay independent after seeing loan losses tied to WaMu. JPMorgan is taking on $176 billion in mortgage-related assets and taking writedowns of about $31 billion, the New York bank said. Some of those were option ARM loans, which are prone to default because they let borrowers defer some interest and add it to the principal. JPMorgan concluded that losses on the loans may equal up to 20 percent of their value, said Sean Ryan, an analyst at Sterne Agee & Leach in New York. Wachovia has $122 billion in option adjustable-rate mortgages. ``If we apply marks similar to those used by JPMorgan in the recent WaMu acquisition, the levels of potential losses would bring Wachovia very close to the threshold of being considered `well-capitalized,' '' Goldman analyst Louise Pitt wrote in a note to investors yesterday. Banks that are less than well-capitalized face curbs on their activities by regulators. Those potential losses may discourage immediate bids for Wachovia, said Larry Carroll, president of Carroll Financial Associates Inc. in Charlotte, which oversees $1.3 billion. ``If you just wait, it may get you at a much cheaper price and not have to take all the bad stuff,'' he said. To contact the reporter on this story: David Mildenberg in Charlotte at dmildenberg@bloomberg.net Last Updated: September 27, 2008 00:02 EDT
So the deal is, stock & bondholders take the heat, where in a buyout they have to support the debt. I would think the market knew about this scam LONG AGO based on my reading of the debt market. JPM did take the mortgages onto it's books, they did not leave that behind, as far as I know.
JPM took the mortgages and wrote them down already. David Faber said a 32 billion write down. Even with the bad mortgages JPM got a steal for Wamu deposits. Just look what the market is saying of JPM versus other banks. Their stock is only about 11 dollars from its all time high. When this shit storm passes there will be some huge winners and collosal banks. JPM will be the leader IMHO.
Bernanke's idea of paying hold-to-maturity prices for bank assets is essentially a wealth transfer from taxpayers to executives and shareholders of worthless banks.
No , the wealth transfer was when they lent your good money to toothless scum to buy grossly overpriced shacks. Where were you when that socialist scam was taking place. lol, the public is even dumber than I thought, and believe me, I figured them for pretty dumb
So now, Wells Fargo and Citi are fighting over WB as reported tonight. "The U.S. government, led by the Federal Reserve and the Treasury Department, are also involved in the talks, the newspaper said. The government is resisting guaranteeing some of Wachovia's assets, as it did for Bear Stearns when it engineered that company's sale to JPMorgan Chase [JPM 48.24 4.78 (+11%) ], and is also opposed to taking over Wachovia unless its financial position deteriorates more rapidly." Seems their situation is not quite what they've been saying it is. Or the media is embellishing. Either way, http://www.cnbc.com/id/26932143