September 29th, 2008
WaMu (Washington Mutual) was seized by the FDIC last Thursday, 9/25/08. JP Morgan came in to gobble them up. It gives JP Morgan access to a lot of bank branches in areas they didn’t have a prescence.
Wachovia wasn’t seized, but the FDIC orchestrated a buy-out by Citigroup. Frankly, I thought Citigroup had enough problems of their own, but I guess it was too good of an opportunity to pass up. Sounds like the story with many of the bad loan pools they invested in, but what do I know. My boss found a couple of interesting notes in the press release the FDIC put out. In the first paragrah it says this was done at no cost to the Deposit Insurance Fund. However, in the third paragraph it says the FDIC entered into a loss sharing arrangement. Citigroup will assume up to $42BB in losses on a $312BB pre-indentified pool of loans. If the loss goes above that, the FDIC picks up the tab. Plus, the FDIC was granted $12BB in preferred stock to help off-set the risk. All of this just makes my head spin.
Here is some good news. There is a great new movie out. It has a limited release. It is called Fireproof. GO See THE MOVIE. Here is a link to the trailer. Regardless of your religious persuasion, this is a great movie. It has danger, action, drama, tears, and laughter. My wife and I went to the 7:00 showing last night. The theatre was packed.
-- By +Chris Duncan