FDIC WaMu Takeover & JP Morgan Chase Buyout Premature
Author: Rob K. Blake | Date: September 25, 2008 | Filed In: Mortgage News
The FDIC announcement tonight of the Washington Mutual failure and subsequent JP Morgan Chase buyout, was 24 hours premature. The FDIC typically announces financial institution failures after the markets close on a Friday, but due to internal leaks to the media they were forced to act sooner.
Reuters reports,
“A top U.S. bank regulator said on Thursday her agency acted swiftly to find a buyer for struggling mortgage lender Washington Mutual Inc (WM.N: Quote, Profile, Research, Stock Buzz) to quell customer anxiety fueled by media leaks.
Bair said, during a telephone call with reporters, she worried about the potential impact a WaMu failure would have on the FDIC’s reserves to insure deposits. She reiterated that there will be more bank failures but the number will be low compared with the savings and loans crisis more than a decade ago. (Reporting by John Poirier; editing by Bernard Orr)”
I am left wondering a little more about the timing of the FDIC announcement as it pertains to the trouble on the Hill passing the Paulson $700 Billion rescue plan.
Does having Washington Mutual’s failure reported a day early so the markets can tank on Friday give the Administration the leverage they need to quell Congressional dissenters…and get the legislation they desperately want?
Sure it does. But will the hold-out Senators and Representatives muster their resolve in the face of the ugliness sure to come tomorrow?
Only time will tell…
Good Luck!
Author: Rob K. Blake
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