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Breaking News: Washington Mutual to be Acquired by JPMorgan Chase (Update1)

Written by Nickel - 5 Comments

Update1: From USA Today…

JPMorgan Chase (JPM) acquired the banking operations of Washington Mutual, (WM) the nation’s largest savings and loan, for $1.9 billion Thursday night in a deal brokered by the Federal Deposit Insurance Corp.

“For all depositors and other customers of Washington Mutual Bank, this is simply a combination of two banks,” said FDIC Chairwoman Sheila Bair. “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,” Bair said.

Original: Apparently JPMorgan Chase & Co. (JPM) is close to a deal to acquire Washington Mutual (WM). Federal regulators have apparently been heavily involved in the negotiations.

While the exact structure of the deal isn’t know, the FDIC apparently won’t be on the hook for any of the costs. That being said, the Wall Street Journal is reporting that it’s likely that “another arm of government” will bear at least a portion of the costs. This makes me wonder if the government might not be picking up some of WaMu’s bad debt to sweeten the pot for Chase. Details should be forthcoming, as Chase has a conference call scheduled for 9:15 PM EST (about 5 minutes from now).

See also: Is WaMy on the Cusp of Failure?

Source: WSJ.com

Published on September 25th, 2008
Modified on November 16th, 2011 - 5 Comments
Filed under: Banking, Economy

About the author: is the founder and editor-in-chief of this site. He's a thirty-something family man who has been writing about personal finance since 2005, and guess what? He's on Twitter!

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5 Responses to “Breaking News: Washington Mutual to be Acquired by JPMorgan Chase (Update1)”

  1. 1
    kitty Says:

    From what I just heard on cnbc, they’ll be acquiring assets – deposits and such, but not the stock. Those who own stock and bonds in WaMu will lose the money. At least this is what I heard. There probably will be more details and all of that could be wrong….

    Nope, I don’t own either WM or its bonds, but I think all of us own it in our mutual funds and in 401K. Probably some bond funds own their debt too. They specifically said all this money will be lost.

    They might say something different now…

  2. 2
    Paul Says:

    There is no doubt in my mind that this is an illegal transaction conducted on the premise that the big bail out bill is coming. If the big bailout bill doesn’t pass then all hell may break loose.

  3. 3
    Frank Miller Says:

    This is unfortunate, but it should serve as a wake up call to all American investors. If you want to protect your money, you need to diversify and invest at least some of it overseas. These are hard times for American investing firms. I personally use offshore bank accounts and they have helped me with diversification and asset protection.

    Best,
    Frank Miller

  4. 4
    Crandall Says:

    …so now it’s obvious why Washington Mutual was offering that ‘great’ 4.0% interest rate — they were bankrupt and desperate for cash just to survive one more week.

    Now, today — we have the largest bank failure in U.S. history.

    Luckily, no one was fooled by that interest rate offer; wise depositors & financial advice-givers avoided unsound banks… no matter what the “advertised” interest rate {?}

    There will be hundreds more bank failures.

    Who do you trust with your money ?

  5. 5
    Kev Says:

    Damn… I actually liked WaMu, where as I pretty much hate Chase as a company.

    My last credit card is with WaMu and I have a 0% balance transfer deal the lasts until July. I have a feeling that offer is going to go away a lot sooner than July now.

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