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Politics : Politics for Pros- moderated -- Ignore unavailable to you. Want to Upgrade?

To: gamesmistress who wrote (270421)	9/26/2008 12:55:27 AM
From: Ruffian	Read Replies (1) \| Respond to of 794197

JPMorgan Chase Buys Washington Mutual for $1.9B Thursday, September 25, 2008 NEW YORK — JPMorgan Chase & Co. Inc. came to the rescue of ailing Washington Mutual Inc. Thursday, buying the ailing thrift's banking assets after WaMu was seized by the Federal Deposit Insurance Corp. This is the second time in six months that JPMorgan Chase has taken over a major financial institution crippled by bad bets in the mortgage market. The deal will cost JPMorgan Chase $1.9 billion, and the bank said in a statement it planned to write down WaMu's loan portfolio by approximately $31 billion. JPMorgan Chase, which acquired Bear Stearns Cos. last March, also said it would sell $8 billion in common stock to raise its capital position. The FDIC, which insures bank deposits, said it would not have to dip into the insurance fund as a result of the seizure. There had been concerns that the fund, which took a big hit after the seizure of IndyMac Bank, could be depleted by a WaMu seizure. The Seattle-based WaMu, the nation's largest thrift, has roughly $310 billion in assets and was searching for a lifeline after piling up billions of dollars in losses due to failed mortgages. WaMu has seen its stock price plummet by 87 percent this year, and it suffered a ratings downgrade by Standard & Poor's earlier this week that put it in danger of collapse. The Bush administration's proposal for a $700 billion bailout for distressed financial institutions was believed to have given fresh impetus to a buyout and new allure to Washington Mutual. Besides JPMorgan Chase, Wells Fargo & Co., Citigroup Inc., HSBC, Spain's Banco Santander and Toronto-Dominion Bank of Canada were all mentioned as possible suitors. WaMu was also believed to be talking to private equity firms. The FDIC was seeking a buyer will to bear a large burden of WaMu's losses, to lessen the impact on the insurance fund. In a statement, JPMorgan Chase said it was not acquiring any senior unsecured debt, subordinated debt, and preferred stock of Washington Mutual's banks, or any assets or liabilities of the holding company, Washington Mutual Inc. JPMorgan Chase said the acquisition will give it 5,400 branches in 23 states. Washington Mutual ran into trouble after it got caught up in the booming part of the mortgage business that made loans to people with bad credit, known as subprime borrowers. Troubles spread to other parts of WaMu's home loan portfolio, namely its "option" adjustable-rate mortgage loans. Option ARM loans offer very low introductory payments and let borrowers defer some interest payments until later years. The bank stopped originating those loans in June. Problems in WaMu's home loan business began to surface in 2006, when the bank reported that the division lost $48 million, compared with net income of about $1 billion in 2005. At the start of 2007, following the release of the company's annual financial report, then-CEO Kerry Killinger said the bank had prepared for a slowdown in its housing business by sharply reducing its subprime mortgage lending and servicing of loans. As more borrowers became delinquent on their mortgages, WaMu worked to help troubled customers refinance their loans as a way to avoid default and foreclosure, committing $2 billion to the effort last April. But that proved to be too little, too late. At the same time, fears of growing credit problems kept investors from purchasing debt backed by those loans, drying up a source of cash flow for banks that made subprime loans. In December, WaMu said it would shutter its subprime lending business and reduce expenses with layoffs and a dividend cut. WaMu became one of the first retail banks to seek outside cash in the wake of the credit crisis when it agreed to sell equity securities to an investment fund managed by TPG Capital and to other investors this spring, raising $7.2 billion in fresh capital. The bank in July reported a $3 billion second-quarter loss — the biggest in its history — as it boosted its reserves to more than $8 billion to cover losses on bad loans.

To: gamesmistress who wrote (270421)	9/26/2008 1:34:53 AM
From: LindyBill	Respond to of 794197

Washington Mutual, Never did like that bank. This is going to REALLY pressure Congress to act this week.

To: gamesmistress who wrote (270421)	11/12/2009 10:16:12 PM
From: KLP	2 Recommendations Read Replies (1) \| Respond to of 794197

Feds move to seize 4 mosques, skyscraper google.com (AP) – 1 hour ago NEW YORK — Federal prosecutors are taking steps to seize four U.S. mosques and a New York City skyscraper owned by a nonprofit Muslim organization. The organization — called the Alavi Foundation — has long been suspected of being under Iranian government control. Prosecutors say the foundation has been helping to illegally funnel money back to the Iranian government. The government filed a forfeiture action in federal court in New York to seize four mosques in the city and in Maryland, California and Houston. The government also wants to take control of a 36-story office tower on New York's Fifth Avenue. The filing starts what could be a drawn-out legal process. The action against the Shiite Muslim mosques is sure to inflame relations between the U.S. government and American Muslims. Many of them are fearful of a backlash after last week's Fort Hood shooting rampage, blamed on a Muslim American soldier. The mosques and the office tower will remain open while the forfeiture case works its way through court. Copyright © 2009 The Associated Press. All rights reserved.