This is Seattle, looking for what went wrong. Now, Charlotte will step up, all the cities will be asking questions. But when it was good, and we were bringing up the questioins, we were nuts. Now, heads roll............ http://seattletimes.nwsource.com/ht...2008368332_sundaybuzz090.html?syndication=rss Treasury's Paulson warned WaMu CEO to sell before it failed Two months before Washington Mutual failed, Treasury Secretary Henry Paulson warned then-CEO Kerry Killinger that he ought to sell the Seattle-based thrift before it deteriorated further. By Seattle Times business staff Rami Grunbaum, deputy business editor, and Seattle Times Business staff Related * WaMu's loyal shareholders left holding the empty bag Two months before Washington Mutual failed, Treasury Secretary Henry Paulson warned then-CEO Kerry Killinger that he ought to sell the Seattle-based thrift before it deteriorated further. "Paulson said, 'You should have sold to JPMorgan Chase in the spring, and you should do so now. Things could get a lot more difficult for you,' " said one of several current and former high-ranking WaMu executives familiar with details of the call. Paulson's July comment, which has not been previously reported, caught Killinger and his top brass off-guard, executives said. Bank officials had recently raised $7.2 billion in capital from investors led by private-equity fund TPG, and they thought that was enough money to weather the worsening mortgage crisis. Killinger declined to comment for this article, and WaMu executives close to him spoke only on condition of anonymity. A Treasury spokeswoman said it does not comment on Paulson's private conversations. Last spring, JPMorgan offered up to $8 a share for WaMu, with the final price depending on how its loans performed. Instead, WaMu sold a partial stake to TPG. When WaMu was seized by federal regulators Sept. 25, most of its banking operations were sold to JPMorgan for $1.9 billion â and the company's stock was rendered worthless. Killinger called Paulson in July to ask that the Treasury secretary use his influence with the Securities and Exchange Commission to add WaMu to a list of 19 financial institutions that were temporarily protected from a form of trading called "naked short selling" that can drive share prices artificially low. Paulson refused to help Killinger get WaMu on the list. WaMu did get on a subsequent list: In mid-September, panic in the stock market prompted the SEC to ban all short selling on 799 financial-institution stocks. That ban came too late for the Seattle thrift, which failed the next week after a run on the bank that was precipitated by credit-rating agencies reducing WaMu's debt to junk-bond status. Its declining ratings were due partly to its falling stock price, which had been harmed by short selling. The WaMu executives did not accuse Paulson of pushing WaMu to fail. Although the thrift's primary regulator, the Office of Thrift Supervision is a bureau of the Treasury, the head of the OTS reports to the president rather than to Paulson. â Melissa Allison CEO denounces corporate greed
Killinger called Paulson in July to ask that the Treasury secretary use his influence with the Securities and Exchange Commission to add WaMu to a list of... Paulson refused to help Killinger get WaMu on the list. ------------------------------------------------ This is very interesting. Would it have been ethical for Paulson to use his "influenece"? Did Paulson make the list? Was Paulson consulted on what co's should be on the list? Who decided what co's were on the list? Did people trade on the fact that it was on the list or not on the list? There are probably more questions but this'll do.
Yeah, lots of CEO's were complaining about naked short selling for lots of years, no action was taken until it was affecting Fanny /Freedie... this government is just one big damned vulture feeding on the carcasses of taxpayers...
are u trying to say the Co's that had naked short positions didn't deserve to have major drops in their prices? where does this artificially low come from. it is obviously the prejudice of the OP who constantly starts new threads on this subject or comments on other threads. WM was not a going concern. the stock price was an option that someone could revive it.
Yeah but congress thought so. And they didn't care about private sector companies that were complaining about naked shorting...