WamuTruth.com Condemns the FDIC & OTS for Causing American Taxpayers Monumental Losses Due to Mismanagement
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TysonMM
Apr 20, 2009, 5:29:05 PM4/20/09
to Washington Mutual
http://www.mmdnewswire.com/wamutruth-4954.html
(MMD Newswire) April 20, 2009 --The FDIC and OTS have caused American
taxpayers monumental losses due to mismanagement, but they have not
had their fair share of "credit" for their misdeeds and negligence.
The capricious seizure of Washington Mutual Bank (WMB) and resulting
fire sale played a significant role in the stock market crash of 2008.
This decision has affected all Americans either directly or indirectly
through the loss of jobs and general downturn in the economy.
The OTS preemptively seized WMB on September 25th, 2008 from
Washington Mutual Inc (Stock Symbol: WAMUQ). The FDIC proceeded to
transfer the assets to JP Morgan Chase (Stock Symbol: JPM) almost
immediately. A memorandum, released by the Wall Street Journal,
supports the conclusion that WMB was indeed solvent when they were
seized. The monetary damages alone total over $60 billion in immediate
losses in conservative bonds and debts. Far more damaging was the blow
to the United States' image and credit market.
Investors across all sectors panicked. The market could not decide
between safe and risky investments. The stock market severely crashed
immediately after this seizure (see the graph at www.WamuStory.com ),
causing severe generalized economic losses throughout the world.
Ironically, TARP was on the horizon and just a week away. The boost of
confidence intended by TARP was not able to overcome the damage done
by the FDIC's fire sale of WMB. In one hour, a bank that was worth
hundreds of billions of dollars was "gifted" to JPMorgan for $1.9
Billion. As a practical matter, our regulatory bodies should act
within reason and good faith. They did not.
In a memorandum to its Board of Directors the FDIC states that it did
not find that WMB was "in default" or "in danger of default".
Washington Mutual Bank was well capitalized with a tier 1 capital
ratio of 7.8 percent. It had access to $54 Billion cash. The OTS made
its decision to seize WMB solely on its jurisdiction to act
preemptively and panicked fear.
The FDIC would not have had a chance to bungle the sale of WMB, had it
not been for the missteps of the OTS. They seized a bank that was not
in failure, and indeed was liquid and well capitalized. The sale by
the FDIC finished it off, due to their negligence in arranging the
transaction.
This is one of the most expensive mistakes the government made in the
"economic meltdown" of 2008. Ms. Sheila Bair said this seizure would
not cost taxpayers anything. She could not have been more wrong. Read
more about these issues at www.WamuTruth.com.
(MMD Newswire) April 20, 2009 --The FDIC and OTS have caused American
taxpayers monumental losses due to mismanagement, but they have not
had their fair share of "credit" for their misdeeds and negligence.
The capricious seizure of Washington Mutual Bank (WMB) and resulting
fire sale played a significant role in the stock market crash of 2008.
This decision has affected all Americans either directly or indirectly
through the loss of jobs and general downturn in the economy.
The OTS preemptively seized WMB on September 25th, 2008 from
Washington Mutual Inc (Stock Symbol: WAMUQ). The FDIC proceeded to
transfer the assets to JP Morgan Chase (Stock Symbol: JPM) almost
immediately. A memorandum, released by the Wall Street Journal,
supports the conclusion that WMB was indeed solvent when they were
seized. The monetary damages alone total over $60 billion in immediate
losses in conservative bonds and debts. Far more damaging was the blow
to the United States' image and credit market.
Investors across all sectors panicked. The market could not decide
between safe and risky investments. The stock market severely crashed
immediately after this seizure (see the graph at www.WamuStory.com ),
causing severe generalized economic losses throughout the world.
Ironically, TARP was on the horizon and just a week away. The boost of
confidence intended by TARP was not able to overcome the damage done
by the FDIC's fire sale of WMB. In one hour, a bank that was worth
hundreds of billions of dollars was "gifted" to JPMorgan for $1.9
Billion. As a practical matter, our regulatory bodies should act
within reason and good faith. They did not.
In a memorandum to its Board of Directors the FDIC states that it did
not find that WMB was "in default" or "in danger of default".
Washington Mutual Bank was well capitalized with a tier 1 capital
ratio of 7.8 percent. It had access to $54 Billion cash. The OTS made
its decision to seize WMB solely on its jurisdiction to act
preemptively and panicked fear.
The FDIC would not have had a chance to bungle the sale of WMB, had it
not been for the missteps of the OTS. They seized a bank that was not
in failure, and indeed was liquid and well capitalized. The sale by
the FDIC finished it off, due to their negligence in arranging the
transaction.
This is one of the most expensive mistakes the government made in the
"economic meltdown" of 2008. Ms. Sheila Bair said this seizure would
not cost taxpayers anything. She could not have been more wrong. Read
more about these issues at www.WamuTruth.com.
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