WaMu: The biggest bank failure in U.S. history.

JPMorgan Buys WaMu Bank Business as Thrift Seized

Sept. 25 (Bloomberg) — JPMorgan Chase & Co., the third- biggest U.S. bank by assets, agreed to acquire Washington Mutual Inc.’s deposits and branches for $1.9 billion after regulators seized the thrift in the biggest bank failure in U.S. history.

Customers withdrew $16.7 billion from WaMu accounts since Sept. 16, leaving the Seattle-based bank “unsound,” the Office of Thrift Supervision said today. WaMu’s branches will open tomorrow and customers will have full access to all their accounts, Sheila Bair, chairman of the Federal Deposit Insurance Corp., said on a conference call.

WaMu’s fate played out as Congress debated an accord to end the global credit crunch that drove Lehman Brothers Holdings Inc. and IndyMac Bancorp out of business and led to the hastily arranged rescues of Merrill Lynch & Co. and Bear Stearns Cos., which was itself absorbed by JPMorgan. WaMu in March rebuffed a takeover offer from JPMorgan Chief Executive Officer Jamie Dimon that WaMu valued at $4 a share.

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WaMu shares plummet 25%

WaMu Said to Approach Blackstone as Bailout Debated

Sept. 25 (Bloomberg) — Washington Mutual Inc.’s options may be dwindling as potential bidders shy away from making an offer because it’s not clear how much the proposed $700 billion U.S. bank rescue package will benefit the Seattle-based lender.

Five banks that were considering bids, including JPMorgan Chase & Co., have failed to make an offer in the week since WaMu put itself up for sale. WaMu next approached Carlyle Group and Blackstone Group LP, two people briefed on the matter said. Those talks are preliminary, and hinge on the government’s role in helping WaMu, which faces an estimated $19 billion in bad loans, the people said, speaking anonymously because the discussions are private.

“A WaMu deal is likely frozen until the bailout gets worked out,” said Steven Kaplan, a finance professor at the University of Chicago Graduate School of Business. “People aren’t in a hurry to make any decision until they know what’s coming out of Washington.”

WaMu is under increasing pressure to strike a deal as its stock sags and ratings companies pummel its debt. Standard & Poor’s yesterday cut WaMu’s rating for the second time in nine days, dropping it to CCC from BB-. WaMu’s regulator, the Office of Thrift Supervision, and the Federal Deposit Insurance Corp., which guarantees customer deposits, have declined to comment.

Read moreWaMu shares plummet 25%

FDIC May Need $150 Billion Bailout as Local Bank Failures Mount

Sept. 25 (Bloomberg) — Deborah Horn tugs on the handle of the glass-paned entrance of the IndyMac Bancorp Inc. branch in Manhattan Beach, California. The door won’t budge. The weekend is approaching, and Horn, 44, the sole breadwinner in a family of three, needs cash.

A small notice taped to the window on this Friday afternoon in mid-July tells her why she’s been locked out. IndyMac has failed, the single-spaced, letter-sized paper says; the bank is now in the hands of the Federal Deposit Insurance Corp.

Read moreFDIC May Need $150 Billion Bailout as Local Bank Failures Mount

Wall Street crisis deepens and Banks rush to do deals

NEW YORK (Reuters) – Manic and increasingly desperate dealmaking gripped Wall Street on Wednesday as U.S. stocks plummeted to three-year lows amid new signs of distress in the global financial industry.

Morgan Stanley was discussing a merger with regional banking powerhouse Wachovia, the New York Times reported. CEO John Mack got a phone call from Wachovia on Wednesday but is also pursuing other options, the paper said.

“In this market, anything’s possible. It seems like the market wants the investment banking model to disappear,” said Danielle Schembri, bond analyst covering brokers at BNP Paribas in New York.

Washington Mutual , the country’s largest savings bank, put itself up for sale, sources said, confirming a New York Times report. Potential suitors include Citigroup, JPMorgan, Wells Fargo and HSBC, they added.

Read moreWall Street crisis deepens and Banks rush to do deals

Federal bank insurance fund dwindling

Federal bank insurance fund dwindling, regulators consider options for replenishing it

WASHINGTON (AP) — Banks are not the only ones struggling in the growing financial crisis. The fund established to insure their deposits is also feeling the pinch, and the taxpayer may be the lender of last resort.

The Federal Deposit Insurance Corp., whose insurance fund has slipped below the minimum target level set by Congress, could be forced to tap tax dollars through a Treasury Department loan if Washington Mutual Inc., the nation’s largest thrift, or another struggling rival fails, economists and industry analysts said Tuesday.

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WaMu shares hit hard

Already battered, Washington Mutual shares fall as potential capital sources’ attention is diverted.

NEW YORK (CNNMoney.com) — Don’t forget about Washington Mutual.

Concerned that Wall Street has done just that, the nation’s largest savings-and-loan plummeted 22% in mid-day trading. Investors are concerned that potential sources of capital have disappeared in the upheaval this weekend on Wall Street that saw Lehman Brothers (LEH, Fortune 500) file the nation’s largest bankruptcy and Bank of America (BAC, Fortune 500) scoop up Merrill Lynch (MER, Fortune 500).

Washington Mutual (WM, Fortune 500) shares were battered last week, losing 36% of their value as investors grew increasingly nervous that the bank didn’t have enough capital to see it through the tsunami sweeping Wall Street.

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Deposit insurance system may face WaMu test

Attention has focused on the danger presented by the failure of Lehman Brothers. But the failure of a commercial bank such as Washington Mutual can have systemic consequences if it threatens a run on other weak banks.

Washington Mutual – the sixth largest bank in the US – has lost more than a third of its market value recently as investors fear it lacks liquidity and capital to survive the credit crisis.

The failure of a bank its size would test the strength of the US deposit insurance system and its ability to maintain the confidence of the nation’s savers.

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Washington Mutual shares sink below $2 on capital worry

NEW YORK (Reuters) – Washington Mutual Inc (WM.N: Quote, Profile, Research, Stock Buzz) shares sank below $2 for the first time since 1990 as anxiety grew about the largest U.S. savings and loan’s mortgage losses, capital needs and survival prospects.

Its shares were down 17 cents, or 7.3 percent, at $2.15 on Thursday on the New York Stock Exchange, but fell to $1.75 earlier in the session. The stock has plunged 44 percent in the previous two days.

Wall Street is worried that Washington Mutual, like Lehman Brothers Holdings Inc (LEH.N: Quote, Profile, Research, Stock Buzz), may not have time to right itself, and that new the chief executive, Alan Fishman, will not find a buyer or raise enough capital for the Seattle-based thrift.

Read moreWashington Mutual shares sink below $2 on capital worry

Morgan Stanley Said to Freeze Home-Equity Credit Withdrawals

Aug. 6 (Bloomberg) — Morgan Stanley, the second-biggest U.S. securities firm, told thousands of clients this week that they won’t be allowed to withdraw money on their home-equity credit lines, said a person familiar with the situation.

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Washington Mutual: Soon to fail

WaMu’s Bloated Asset Values Don’t Fool Investors

July 30 (Bloomberg) — With goodwill like Washington Mutual Inc.’s, it’s no wonder investors are getting such bad feelings about the company’s finances. Shares of the Seattle-based savings and loan have fallen 89 percent the past year to $4.43, leaving the company with a $7.6 billion stock-market value. The stock’s plunge must be a horrible mistake if we are to believe the values WaMu attributes to the assets on its balance sheet.

Read moreWashington Mutual: Soon to fail