Image by Don Nunn via Flickr
Washington Mutual Is Gone
The FDIC took over Washington Mutual late yesterday and sold their assets to JP Morgan Chase, for 1.9 billion dollars. WaMu shares had plummeted to 95% below their last year’s highs. JP Morgan, you’ll remember, was also the lucky purchaser of Bear Stearns earlier this year.
WaMu, with assets of more than 307 billion dollars, is by far the largest bank to ever fail in America. The 2nd largest, Continental Illinois National Bank, which failed in 1984, carried assets of around $68 billion(adjusted to 2008 dollars). IndyMac, which failed earlier this year, had assets of around $32 billion.
According to FDIC chairman Sheila Bair, depositors at WaMu should not be worried about their savings.
“For all depositors and other customers of Washington Mutual Bank, this is simply a combination of two banks,” Bair said in a statement. “For bank customers, it will be a seamless transition. There will be no interruption in services and bank customers should expect business as usual come Friday morning.”
The deal makes JP Morgan Chase the 2nd largest bank in the USA, just behind Bank of America. One can only wonder how solid either of these two are since buying up the likes of Bear Stearns, Merrill Lynch and Washington Mutual. Short term gains appeared as JP MOrgan stock rose over 4% by midday Friday.
I am Jon, and it looks like a JP Morgan kind of year…
(edit: See here and here for the reaction of the world markets.)
