WAMU TAKEN BY AUTHORITIES TO KEEP DEPOSITORS SAFE
Oh, man, I am so ready to read the Harvard Business School case study of this amazing story. (Not being sarcastic - my nose says there is a classic story in there).
BTW, I question the timing of this FDIC action. Please check Sheila's phone logs to the White House, okay? You can never be too sure with the Bush Administration. The spirit of Rove...lingers on.
Update: Check it out. For all those thinking that a "deposit base" is the answer. From Wamu's last reported liability structure:
| Deposits (in $millions): | | |
| Noninterest-bearing deposits | 31,341 | |
| Interest-bearing deposits | 162,939 | |
| Total deposits | | 194,280 |
| | ||
| Federal funds purchased and commercial paper | 2,482 | |
| Securities sold under agreements to repurchase | 4,732 | |
| Advances from Federal Home Loan Banks | 52,530 | |
| Other borrowings | 40,887 | |
| Other liabilities | 8,313 | |
| Minority interests | 2,945 | |
| Total liabilities | | 306,169 |
(That's right, fully two-thirds of all liabilities were ... deposits)
Update2: Jamie got a really good deal (again). They left behind about $30 billion in unsecured
They are just about golden, on this one, I'd say ... The $8billion in new money they need to support the deposit base will be less than how the market will value the additional earnings: they will get a nice stock price pop, despite having to raise money to get the deal done "right". Nice.
Last, they are making so much money on trading, etc., that they will likely be able to absorb / amortize $3.5 billion in further markdowns on the merde in the portfolio.
Update3: Technically, it is the Office of Thrift Supervision, with the final call, not FDIC. The $30 billion equates to a 90-cents on the dollar writedown.
