tag:blogger.com,1999:blog-4815867514277794362.post121799329463344317..comments2024-03-08T06:18:28.125+11:00Comments on Bronte Capital: The reckless, irresponsible seizure of Washington Mutual: please read in Washington DCJohn Hemptonhttp://www.blogger.com/profile/03766274392122783128noreply@blogger.comBlogger41125tag:blogger.com,1999:blog-4815867514277794362.post-22065833966202510062010-02-15T17:30:02.449+11:002010-02-15T17:30:02.449+11:00Obviously this whole fraud/travesty isn't over...Obviously this whole fraud/travesty isn't over. The case is ongoing. An equity committee has been appointed by the US Trustee.<br /><br />The illegality of this seizure was staggering and the truth will see the light of day in the coming weeks.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-18987777773085782432009-05-03T22:17:00.000+10:002009-05-03T22:17:00.000+10:00Unfortunately I lost $84,000 of my retirement fund...Unfortunately I lost $84,000 of my retirement fund due to that seizure. Money that will never come back that I had saved from the 1980s. No one cares in our government. It was a total joke, yet banks like Wachovia were in much worse shape.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-82082973181723360112009-04-26T06:09:00.000+10:002009-04-26T06:09:00.000+10:00After 7 months JP Morgan still holds 4 billion dol...After 7 months JP Morgan still holds 4 billion dollars, the ownership of which is contested on highly questionable grounds. Imagine someone keeping $250K of your money after you ask them to hold it for you. You ask for it back and they say it is not yours because they have it. The bank holding company is not the bank. The money belongs to the WMI, the holding company. Sheila Bair and the FDIC have admitted publicly that they have no legal right to seize holding companies. Therefore JPM is simply saying, "possession is 9 10th of the law". If this is this true I may have to go into the thieving business too!Joseph E. McCluskeyhttps://www.blogger.com/profile/17504117734909780053noreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-6929649995271696672009-04-05T03:14:00.000+10:002009-04-05T03:14:00.000+10:00It’s my understanding that the WMI lawyers have re...It’s my understanding that the WMI lawyers have requested a Jury Trial. I hope that they (Weil, Gotshal & Manges) get it and examine (under oath); Paulson, Bair, OTS Officials & Dimon. I expect them to go for triple damages when it’s proven that the FDIC knowingly (or out of negligence, doesn’t matter) gifted more than the “whole bank” to JPM(c) (Providian for example). I’m not a lawyer but it’s obvious to me that JPMC’s recent Proof of Claim was a joke and a mockery of Judge Walrath’s order.<BR/><BR/>Abraham Lincoln (attributed): “You can fool some of the people all of the time, and all of the people some of the time, but you can not fool all of the people all of the time.”<BR/><BR/>It’s that simple folks – FDIC/JPM wants you to believe all was well with the fire-sale of WAMU but the truth is: The FDIC has no idea what they conveyed to JPM and as a result has recently resorted to claims of mismanagement and underfunding in an attempt to “thump their chest in public” even though their own sister agency (OTS) was in the WAMU books for months and said WAMU was well capitalized. And JPM while on one hand says (in public mind you) they paid fair value for the assets of WAMU and their purchase of WAMU brought great relief to JPM and its shareholders (you’d have to read JPM’s Shareholders PR), JPM contradicts itself in its own pleadings to the court saying that if there is a reversal of sorts – JPM stands to lose Billions (with an s) not 1.9 Billion…<BR/><BR/>I hope and hope for a jury trial – the good thing about Bankruptcy court is that they follow the the letter of the law to a “T”. We may not get triple damages but Paulson, Bair and Dimon will be severely damaged by their own words and actions – God Bless America.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-5742667029721530802008-12-11T12:35:00.000+11:002008-12-11T12:35:00.000+11:00Here, http://money.cnn.com/galleries/2008/fortune/...Here, http://money.cnn.com/galleries/2008/fortune/0812/gallery.market_gurus.fortune/4.html , may be some clues to her reasoning, though.The Knitterhttps://www.blogger.com/profile/12573577449557733639noreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-71500805016910162742008-10-24T09:19:00.000+11:002008-10-24T09:19:00.000+11:00This issue is far from over. Just read through som...This issue is far from over. Just read through some of the articles and posts regarding the bankruptcy on http://wamurape.org and the developing court cases against JPM.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-17919538313318368802008-10-07T04:02:00.000+11:002008-10-07T04:02:00.000+11:00FDIC is requiring senior debt holders to file writ...FDIC is requiring senior debt holders to file written notice of claim. Info is on the FDIC site at:<BR/><BR/>http://www.fdic.gov/bank/individual/failed/wamu.html<BR/><BR/>Has anyone filed yet?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-27259776922305679832008-10-01T14:39:00.000+10:002008-10-01T14:39:00.000+10:00The worst thing about this seizure was that the pa...The worst thing about this seizure was that the parties interested in acquiring WaMu did their due diligence, negotiated with management, then went out the door and around the corner and negotiated with the FDIC. The FDIC had a fiduciary responsibility only to depositors, the power to close the bank, and a great incentive to do a deal that cost them nothing.<BR/><BR/>JPM can't be faulted for doing a great deal, but the FDIC really went too far on this one. JPMs $31 billion of writedowns is not "instead of" the $19 billion loss estimate of WM it is "in addition to" and almost certainly has some built in profit. Some commentors suggested that WM wouldn't be "well-capitalized" if it had taken that additional write-down. If no tax benefits are considered you would be correct. However the standard at that point isn't "well-capitalized" it's "capitalized at all".<BR/><BR/>As a common stockholder I knew I had a high risk investment, but if I were a senior debt holder I would be very irate at the way this went down.Kinabaluhttps://www.blogger.com/profile/03424839703348263437noreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-74598995112992657982008-10-01T01:58:00.000+10:002008-10-01T01:58:00.000+10:00According to WM bankraptcy petition "debter estima...According to WM bankraptcy petition "debter estimates that funds will be available for destribtution to unsecured creditors". Since the filing of the petition the price of the senior notes jumped to $60. Does this mean that senior bondholders will be compensated after all?<BR/>If this does not happen, however, can anyone please comment on a possibility of legal recourse.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-58990671584738135542008-09-30T15:04:00.000+10:002008-09-30T15:04:00.000+10:00any one know how much senior debt issued by wamu? ...any one know how much senior debt issued by wamu? for a holder of senior debt, how much can he get back in percentage?Unknownhttps://www.blogger.com/profile/13529176275452956117noreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-88619529338028620932008-09-30T07:14:00.000+10:002008-09-30T07:14:00.000+10:00The first thing JPM did after they acquired WM was...The first thing JPM did after they acquired WM was take a $31B writedown. So WM really didn't have 7.8% Tier 1 capital. The bank was genuinely insolvent, negative capital, operating only because they had cash in hand. Admittedly, JPM had some negative assumptions about the future of the housing market, but if they come true, senior holders would have been wiped out anyways.dcxavierhttps://www.blogger.com/profile/17215383069141197123noreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-84861539633792975112008-09-29T23:34:00.000+10:002008-09-29T23:34:00.000+10:00Wamu actually did run out of money. $50bn of liqui...Wamu actually did run out of money. $50bn of liquidity included brokered deposits which they were no longer able to roll.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-84872356342842112212008-09-29T23:04:00.000+10:002008-09-29T23:04:00.000+10:00Good post. Problem can be simplied to the involve...Good post. Problem can be simplied to the involvement of politicians. Politicians can and do write/rewrite laws. Even here in the US. Depositors (i.e. voters) versus big nasty bondholders? Eazy choice. <BR/><BR/>What if the government came in and said, we will guarantee all existing individual, government and small business deposits up to [insert relevant amount - I do not know] for the near future. In the meantime, we will begin selling all assets, replaced with Treasury purchases until and such time that we can reasonably sell or dispose of the bank and/or return all small depsosits. We will assign the losses and they will go, equity, preferred, sub, senior, big depositors, government. And my best guess is that senior would have had a substantial loss, but not the near to total wipe out. <BR/><BR/>The problem is they tried to do all of that in 1hr. It probably amounts to illegal taking. And unfortunately, I agree that bank financing will never be the same.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-24411375521250067002008-09-29T22:05:00.000+10:002008-09-29T22:05:00.000+10:00I'm sad that you're in this situation, but there'r...I'm sad that you're in this situation, but there're those of us who'd never want to have anything to do with Washington Mutual. When you dance with the devil on a bridge over hell, you shouldn't expect it to be like on the Brooklyn Bridge. WaMu was a reckless, irresponsible institution, lots of sensible people thought that it was worthless. Why would one want to deal with them?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-76687354731808925962008-09-29T18:09:00.000+10:002008-09-29T18:09:00.000+10:00Here is a link the bankruptcy filing for WMI.It se...Here is a link the bankruptcy filing for WMI.<BR/><BR/>It seems the holding company claims 32 + billion assets and only 8+ billion debts.<BR/><BR/><BR/><BR/>http://seattletimes.nwsource.com/ABPub/2008/09/27/2008209491.pdfUnknownhttps://www.blogger.com/profile/12756177614625146325noreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-76598420206014875182008-09-29T16:37:00.000+10:002008-09-29T16:37:00.000+10:00Home equity release schemes have become increasing...Home equity release schemes have become increasingly popular, largely as a result of the massive increase in property values, in recent years. You can get still more information about <A HREF="http://www.bettervaluegroup.co.uk/" REL="nofollow">equity release</A> which I browsed on internet can fetch you help.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-81592710281661097932008-09-29T15:26:00.000+10:002008-09-29T15:26:00.000+10:00I think James is right that the stuff about priori...I think James is right that the stuff about priority of claims is mostly a smokescreen. The depositors, the seniormost creditors, got paid in full. The next tranche, senior loans, will receive a small dividend on their claims. Everyone else is wiped out.<BR/><BR/>So your real complaint is either that the price to JPM wasn't a fair market price, which might be true, or that you think WaMu's creditors should have been given time for the market price to increase. I can't really comment on the first argument. Is there any evidence that a better offer was out there, or could have been found? Given the failure of the sale process, I think not.<BR/><BR/>The latter argument, that WaMu should have been given time for its sale value to increase, is not very good. If the creditors are only receiving a de minimis payment from the JPM purchase, then that means that the depositors and the insurance fund were only a de minimis loss away from being hit by a further decline in market values. Why should the senior creditors have to run the risk of loss when the upside will go to creditors and equity?Robert Beardhttps://www.blogger.com/profile/18287273919003384102noreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-86829221554342408252008-09-29T13:29:00.000+10:002008-09-29T13:29:00.000+10:00Given this drastic degradation of seniors, shouldn...Given this drastic degradation of seniors, shouldn't the credit rating agencies be out now, marking down all banks with one fell swoop? <BR/><BR/>If seniors weren't aware of the omnipotent power the FDIC has,they should be sensing it through the ratings given to this debt. Surely a couple notch knockdown has to reflect an action which seemingly violates the 4th amendment?!Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-87937128440551483792008-09-29T10:45:00.000+10:002008-09-29T10:45:00.000+10:00If WM took the 31 billion in writedowns JP Morgan ...If WM took the 31 billion in writedowns JP Morgan put on would it still be viewed as well capitalized? <BR/><BR/>Does that count the mass withdrawals that were taking place in terms of deposits that were being moved out or did they still have room despite the deposits going out.<BR/><BR/>if thy did--then I think you have a right to be pissed. If not, then I think WB and Citibank are possibly next.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-29166433307468832412008-09-29T06:11:00.000+10:002008-09-29T06:11:00.000+10:00If you can't see a JP Morgan CDS exposure cove...If you can't see a JP Morgan CDS exposure cover up, you are not looking! I have been screaming this since the Lehman Bankruptcy. I've sent the e-mail below to news agencies (CNN, Bloomberg, WSJ & CNBC)and a few bloggers and the only one that actknowledged and confirmed my story was Martin Weiss. Read it and make sure the word gets out!<BR/><BR/>OK, here is the story as it was reported and now verified:<BR/><BR/> <BR/><BR/>On Monday the 15th of September Lehman Brothers Filed for bankruptcy and later that day received two advances of funds from J.P. Morgan Chase totaling $138 Billion Dollars. The story went on to report that Lehman Brothers then used those funds to settle some outstanding CDS contracts that it had contingent exposure. Then The Treasury Department transferred $87 Billion Dollars from its coffers to J.P. Morgan Chase as repayment from and on behalf of Lehman Brothers. The article was unclear as to a second payment of $51 Billion was paid or not and I assumed that matter would have been cleared up in the follow up story. The author of the original story seemed to have obtained his/her information or at least some of the information from papers filed by Lehman Brothers with the bankruptcy court, as he/she stated that Lehman Brothers requested that the court give J.P. Morgan’s cash advances priority when the court was settling their financial affairs.<BR/><BR/> <BR/><BR/>Below is a cut and paste of the story ran by Money and Markets covering the reason everyone should be owning Gold Futures, but look at bottom of the total of Bail Monies expended by either the Treasury Dept or the Fed to date and you’ll see the $87 Billion of Tax Payer Money to J.P. Morgan on behalf of Lehman Brothers who the Fed & Treasury said they would not help. Why is there NO NEWS of these transactions in the American Press! If they are not dodgy, then explain them. How does that go under the radar?<BR/><BR/> <BR/><BR/>The Bear Stearns takeover by JP Morgan, which was midwifed by the federal government (cost to taxpayers: $29 billion) <BR/>Special Fed liquidity programs including the Term Lending Facility and Term Auction Facility ($200 billion) <BR/>The Economic Stimulus package ($168 billion) <BR/>The Federal Housing Administration's scheme to refinance failing mortgages into new, reduced-principal loans with a federal guarantee ($300 billion) <BR/>The bailout for Fannie & Freddie (up to $200 billion) <BR/>The bailout for AIG ($85 billion) <BR/>Last week's decision to block short-selling of financial stocks <BR/>The insurance program for money market funds (potentially $50 billion from the Great Depression era Exchange Stabilization Fund) <BR/>Direct Treasury purchases of mortgage-backed securities ($10 billion) <BR/>Another $300 billion injected into global credit markets on Friday <BR/>Add in the $700 billion proposed for the current bank bailout plan, $87 billion in repayments to JP Morgan Chase for providing financing to underpin trades with bankrupt investment bank Lehman Brothers, etc., etc., and I tally up over $1.8 TRILLION ... so far.<BR/><BR/> <BR/><BR/>My major problem with this is the Fed and Treasury has always stated that they were not going to bail out Lehman, Lehman did declare bankruptcy, but yet the Treasury obviously expended $87 Billion Dollar of Tax Payer Money on behalf of Lehman without bailing them out. They got 80% of AIG for lending AIG $85 Billion Dollars and that was huge news. How did $87 Billion get expended and nobody or very few seem to know about it? Why are we even thinking about giving them another $700 Billion when they are obviously playing games with $87 Billion?<BR/><BR/> <BR/><BR/>You might want to take a close look at why J.P. Morgan and The Treasury want to keep any big news about Derivatives and CDS exposures out of the news. Remember the Bear Stearns collapse, who had about $30 Billion of Derivate and CDS exposure? Who was the forced buyer? (J.P. Morgan) Who holds 50% of worlds Derivatives and CDS contracts and has exposure to them? (J.P. Morgan) Who just coughed up $138 Billion to assist Lehman Brothers to quietly settle CDS contracts while in Bankruptcy? (J.P. Morgan) Who repaid J.P. Morgan on behalf of Lehman? (The Treasury) Who denied AIG a $40 Billion Dollar bridging loan all weekend and was about to let them fail with Lehman before doing an 180 degree back flip when they found out AIG’s CDS exposures and CDS interconnections? (The Treasury)<BR/><BR/> <BR/><BR/>$62 TRILLION DOLLAR MARKET unraveling is what really has these guys spooked. $700 Billion is just a drop in the bucket!<BR/><BR/> <BR/><BR/>Best Regards and Good Luck,<BR/><BR/> <BR/><BR/>JimAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-88217363155033560422008-09-29T05:57:00.000+10:002008-09-29T05:57:00.000+10:00I found this post confusing. Aren't depositors, e...I found this post confusing. Aren't depositors, even uninsured depositors, senior to debtholders? Who got the money that you think should have gone to the bondholders?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-65421070091771215032008-09-29T05:02:00.000+10:002008-09-29T05:02:00.000+10:00Good piece, Mr Hempton-I also lost money on WM bon...Good piece, Mr Hempton-<BR/>I also lost money on WM bonds. I also agree with your assessment of how bondholders were sacrificed to get a quick deal with no government money involved. You say there is no recourse, but is that necessarily so? After all, the terms of the Bear Stearns deal were also renegotiated when it became clear that they were not fair. Someone in the government ought to take note of your statement of what this behavior will do to future availability of capital if it is allowed to stand. Your thoughts?<BR/>Also, the bond I hold (which, by the way, had a Jan 2009 maturity!) closed Friday at 30, instead of being worthless. Why is that? What is the mechanism by which bondholders will recover any money at all under the existing deal?<BR/><BR/>SSAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-86445581752833771072008-09-29T04:47:00.000+10:002008-09-29T04:47:00.000+10:00Hi,Sorry for being stupid, but why dont you sue th...Hi,<BR/><BR/>Sorry for being stupid, but why dont you sue them?<BR/><BR/>There must be many others willing to do this.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-11616615590671557392008-09-29T04:32:00.000+10:002008-09-29T04:32:00.000+10:00Thanks for your commentary. I'm not a regular rea...Thanks for your commentary. I'm not a regular reader but Googled "Wamu creditors confiscated" and it directed me to your article. I am surprised that the media has missed a big part of the story. <BR/><BR/>According to the press releases JPM got $276B of assets ($307B book value written down by $31B)in return for accepting $188B of deposit obligations. So as near as I can tell, JPM got an $88 billion capital infusion for a total consideration of $1.9B! Did JPM have to take on any other liabilities, or did it ancually receive an $86B windfall from the FDIC? It's hard to tell.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-14345219574851047462008-09-29T04:09:00.000+10:002008-09-29T04:09:00.000+10:00Again, you're missing the subtleties of regulatory...Again, you're missing the subtleties of regulatory politics. The closure of WaMu is a disaster for the OTS - and, if you're cynical (which you should be in the political arena) it's a boon for the other agencies.<BR/><BR/>The other point I think you're missing relates to the bailout. Speculation about the bailout made an outright sale of WaMu impossible - why buy anything until you see whether or not the Feds will take of some of WaMu's crap? The cost of taking WaMu into receivership continued to climb due to the deposit run and the bailout prevented anyone from buying without a takeover.Anonymousnoreply@blogger.com