While you were sleeping: WaMu

JPMorgan Chase buys WaMu assets after FDIC seizure

JPMorgan Chase & Co. Inc. came to the rescue of Washington Mutual Inc. Thursday, buying the thrift's banking assets after WaMu was seized by federal regulators in the largest failure ever of a U.S. bank. This is the second time in six months that JPMorgan Chase has taken over a major financial institution crippled by bad bets in the mortgage market.

The deal will cost JPMorgan Chase $1.9 billion, and the bank said in a statement it planned to write down WaMu's loan portfolio by approximately $31 billion. JPMorgan Chase, which acquired Bear Stearns Cos. last March, also said it would sell $8 billion in common stock to raise its capital position.

The Federal Deposit Insurance Corp., which insures bank deposits, said it would not have to dip into the insurance fund as a result of the seizure. There had been concerns that the fund, which took a big hit after the seizure in July of IndyMac Bank, could be depleted by a WaMu seizure.

In the weeks since it was announced that WaMu failure was imminent, the bank's customers pulled $16.7 billion in deposits, leaving the bank without any assets. Thus the boys at JP Morgan Chase get to swoop in and pick the bones clean of another victim. Apparently the 5 people who left their money in WaMu won't notice any change, as it will be just like any other bank switchover, and there will be no need for further mass banks runs with the money grabbing, window smashing, teller bruising, and grabbing on pens with chains on them in an attempt to posses anything of value now that your life savings are erased.

Better news is the fact that the FDIC won't have to eat shit on paying out the money it insured to a failed bank, and thus won't need to be bailed out. Yet. Yes, you heard right, the FDIC might need bailing out. Well, not bailing out so much as government insurance that the they can pay out the money they insured in all those failing banks. Our government insurer needs government assurance. Remember, you always have a matress to store your money under. Trust in Sealy and their postur-pedic, money caressing springs.