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Posted
Sep 30 2008, 09:47 AM
by
Kim Peterson
Rating:
Money Blog: Top Stocks Blog - MSN Money
Congress wants to crack down on CEO mega-salaries for banks participating in the bailout. And while the politicians argue how best to do that, Alan Fishman of Washington Mutual is headed for the doors with $19 million in his pocket.
If that wasn't outrageous enough, consider this: Fishman started the job three weeks ago. I never saw the employment ad Fishman answered, but it must have read something like this:
WANTED: Top executive for train-wreck bank about to be seized by federal regulators. Must be able to look busy while FDIC sells business from under you. Previous experience with angry shareholders sitting on worthless stock a plus. Perks: $7.5 million hiring bonus and $11.6 million cash severance.
Fishman got the best temp gig in history.
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Posted
Sep 26 2008, 03:54 AM
by
Douglas McIntyre
Rating:
Money Blog: Top Stocks Blog - MSN Money
Washington Mutual failed yesterday and most of its assets where sold to JP Morgan. The price was $1.8 billion. JPM will have to write down $31 billion in bad loans, but, since Jamie Dimon is now the king of the banking world, he should be able to raise the capital to cover that. In the meantime, he has picked up $307 billion in assets.
According to The Wall Street Journal, "The deal will vault J.P. Morgan into first place in nationwide deposits and greatly expand its franchise." The people who get drawn-and-quartered in the process are the WaMu bondholders and those who own the common stock. Washington Mutual shares were at over $36 a year ago. Now, they are worth nothing. About $50 billion in market cap has been destroyed.
The failure, the biggest in U.S. history, does not mean much. Depositors are protected. The beating shareholders take is no different than any other when a large company fails. The system worked well. A healthier firm got the pieces of the failed firm on the cheap. JP Morgan will be the better for the deal and when the financial markets recover, the purchase of WaMu's assets may look like the deal of the century.
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Posted
Sep 24 2009, 12:13 PM
by
Kim Peterson
Rating:
Money Blog: Top Stocks Blog - MSN Money
 Traders are hot on zombie stocks these days, trying to make a buck from companies everyone else has written off as dead.
Washington Mutual went bankrupt, but its stock is suddenly smoking -- gaining 64% Monday, the Los Angeles Times reports. No one really thinks the company is going to magically return to life soon, but investors are hoping even a tiny uptick in the share price will bring profits.
Remember Lehman Brothers? Shares of the bankrupt bank have quintupled in the last four weeks, the Times reports. And General Motors -- or, should I say, Motors Liquidation Co. (MTLQQ) -- has seen shares more than double.
It's a dangerous game, playing around in these stocks that common sense would tell you to stay away from. So who's dabbling in the dead?
Experts tell the Times that aggressive day traders are likely to blame. They're snapping up enormous volumes of the shares, looking for something as small as a 1-cent increase on a 1 million share block
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Posted
Oct 28 2008, 03:27 AM
by
Douglas McIntyre
Rating:
Money Blog: Top Stocks Blog - MSN Money
No one with an abacus, a calculator or a mainframe will ever know what the global credit crisis has cost in real money. Lost jobs means lost tax revenue. Lost bank capital means a drop in share values. Government aid must be near $1.5 trillion when the taxpayers' $700 billion is added to what all other nations have put in to shore up banks.
The Bank of England reckons the cost of the near-collapse of the financial system is $2.8 trillion. It does not say precisely how it came up with that figure, but in the guessing game that hardly matters.
Looking at the issue from a simpleton's perspective, Citigroup has lost $200 billion of is market cap. The number for Wachovia is more like $100 billion. The loses to Lehman and WaMu shareholders are of a similar magnitude. By these calculation
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Posted
Sep 07 2008, 09:40 PM
by
Charley Blaine
Rating:
Money Blog: Top Stocks Blog - MSN Money
Now that the Federal Government has taken control of Fannie Mae and Freddie Mac, what happens next?
Futures trading in U.S. stock indexes suggests the stock market will start the day with a huge rally, with the Dow Jones industrials up at least 250 points, a gain of at least 2%. Asian markets were higher today, and bank stocks in Asia and Australia were higher.
This seems to fly in the fact of such market bears as MSN Money columnist Bill Fleckenstein, who sees more stress ahead for the markets because the economy is so dicey.
Assuming the market moves higher on the day, the big question remains: How much higher can stocks move and for how long?
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Posted
Apr 07 2008, 11:12 AM
by
Matt Koppenheffer
Rating:
Money Blog: Top Stocks Blog - MSN Money
Washington Mutual chief executive Kerry Killinger might as well be standing in front of a "Mission Accomplished" banner today. WaMu shares are skyrocketing on hopes of a $5 billion investment from private equity shop TPG that would give the bank a nice cushion to deal with its massive lending missteps.
While Citigroup, Bear Stearns, and Merrill Lynch may grab most of the headlines because the magnitude of their losses was so great, WaMu has managed to lose an impressive amount of money for a bank of its size. WaMu finished 2007 with a loss of $67 million thanks to loan loss provisions above $3 billion and charge-offs of $1.6 billion.
Meanwhile, the company seems to care far more about Mr. Killinger than its shareholders. After reporting the dismal results for 2007 -- results that took the stock down 70% from where it started the year -- the board of directors concocted a compensation plan that would ignore the effects of the bank's potential loan losses, foreclosed real estate, and restructuring. So in the coming year, while investors will continue to feel the effects of further losses, the executive team can rest easy that their payout won't be crimped by their past strategic decisions.
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Posted
Sep 26 2008, 11:48 AM
by
Anthony Mirhaydari
Rating:
Money Blog: Top Stocks Blog - MSN Money
With everyone comparing the current economic crisis to the Great Depression, I'm struck by the similarities to the Panic of 1907. Courtesy of derivatives expert Satyajit Das, take a look at the following except from the Economist:
"...public credit depends on public confidence…The financial crisis in America is really a moral crisis, caused by the series of proofs …that the leading financiers who control banks, trust companies and industrial corporations are often imprudent, and not seldom dishonest. They have mismanaged…funds and used them freely for speculative purposes. Hence the alarm of depositors and a general collapse of credit…"
These words were written on November 2, 1907
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Posted
Sep 17 2008, 11:58 AM
by
Minyanville
Rating:
Money Blog: Top Stocks Blog - MSN Money
The US government is attempting to organize a buyout of battered Washington Mutual, the New York Post reports.
The sticking point: "No one knows what's in their books," the newspaper said, quoting an unnamed person.
Citing anonymous sources, the New York Post says federal regulators have had discussions with several banks, including Wells Fargo, JPMorgan Chase and HSBC Holdings. However, the newspaper said that no discussions of a deal between the banks and Washington Mutual are underway.
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Posted
Sep 11 2008, 10:06 AM
by
Minyanville
Rating:
Money Blog: Top Stocks Blog - MSN Money
Washington Mutual’s stock fell about 12.5% in mid-morning trading on Wednesday, to $2.03 a share, amid fears that the battered bank is facing more trouble ahead as adjustable-rate mortgages reset.
The stock plunge followed Standard & Poor’s Ratings Services’ decision to lower its outlook to “negative” from “stable” after Washington Mutual booted CEO Kerry Killinger. The bank’s stock has lost about 95% of its value in the last 52 weeks.
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Posted
Sep 19 2008, 10:30 AM
by
Minyanville
Rating:
Money Blog: Top Stocks Blog - MSN Money
A week ago, the United States had the most efficient capital allocation system in the world.
Our free-market economy enabled money, credit and resources to be sent to the economic players who needed it. Entrepreneurs could raise money to start new, innovative businesses; researchers could seek out cures for diseases that touch millions of lives, as well as those that afflict just thousands; firms that made enough bad decisions went bankrupt.
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