The Federal Deposit Insurance Corp will seize Washington Mutual and sell its deposits to JPMorgan Chase for an undisclosed sum, CNBC has learned. The deal is expected to be announced during a Thursday night conference call at 9:15 p.m. ET.The MAVERICK plan is go. It will be a bloodbath tomorrow on Wall Street after this. They will have to pass a plan, and the House GOP crazy ass tax cut plan is what will result.
Federal regulators have been heavily involved in putting together the transaction, which comes as WaMu is besieged by a huge number of bad mortgage loans on its books.The exact details of the deal aren't known as yet, but JPMorgan is expected to acquire WaMu's deposits and branches, as well as other operations. The deal isn't expected to expected to result in any hit to the bank-insurance fund.
God, this was all planned out from the beginning. Jesus hell. Obama and the Dems are going to get ROLLED.
[UPDATE] God, it's all coming together.
The plan circulated by Cantor calls for a mortgage-backed security insurance fund, rather than taxpayer-funded purchases of those securities. The plan calls on the Treasury to design a system to charge premiums to MBS holders to finance the insurance, according to a fact sheet.
Republicans also seek ``temporary tax relief'' provisions aimed at allowing financial companies to free up capital. It also suggests that regulators call on financial institutions to suspend dividends, along with other steps to address liquidity problems.
`Wall Street Pays'
Cantor said the House Republican proposal ``does not leave the American taxpayers with the bag and makes sure that Wall Street pays for this recovery.''
[UPDATE 2] It's official. We've just seen the largest single bank failure in US history tonight.
Washington Mutual, the largest U.S. savings and loan, was closed by the federal Office of Thrift Supervision, and the Federal Deposit Insurance Corp was named receiver. Customers should expect business as usual on Friday, the FDIC said.And now the GOP has just walked out of the bailout talks.
The bailout came after the thrift suffered deposit outflows of $16.7 billion since Sept. 15, the OTS said.
"With insufficient liquidity to meet its obligations, WaMu was in an unsafe and unsound condition to transact business," the OTS said.
Seattle-based Washington Mutual has about $307 billion of assets and $188 billion of deposits, regulators said. The nation's largest previous banking failure was Continental Illinois National Bank & Trust, which had $40 billion of assets when it collapsed in 1984.
The transaction gives JPMorgan roughly 5,400 branches, and fulfills JPMorgan Chief Executive Jamie Dimon's long-held goal of becoming a retail bank force in the western United States.
It comes four months after JPMorgan acquired the failing investment bank Bear Stearns Cos at a fire-sale price.
A meeting at the White House between President Bush, congressional leaders and the presidential candidates was meant to speed approval of an agreement. Instead, the session revealed deep divisions between Democrats and House Republicans.I feel physically ill. The only thing worse than the Paulson plan is the House GOP plan.
As a result, House and Senate leaders and Treasury Secretary Henry Paulson rushed to Capitol Hill at 8 p.m. to try to hash out a deal.
But shortly after 10 p.m., Rep. Barney Frank, D-Mass., the lead House Democrat on the issue who had been in close talks with Paulson for days, accused Republicans of refusing to negotiate.
"At this point, we have absolutely no participation or cooperation from House Republicans," Frank said.
The next step was not clear late Thursday night. One thing seems certain: Lawmakers won't recess for the year on Friday, as originally planned. Instead, if they can't reach a deal in the next 24 hours, they're likely to work through the weekend.
The bankruptcy provision is not the only sticking point, however. House Republicans are not on board, according to Minority Leader Rep. John Boehner, R-Ohio.Insanity. Pure insanity. The GOP is hoping for the biggest game of chicken ever tomorrow when the bottom drops out of the Dow. They won't budge. Even worse I'm betting there's scads of Bush Dog Democrats willing to go along with this insanity.
"House Republicans have not agreed to any plan at this point," Boehner said.
Instead, they issued a statement of economic rescue principles that calls for Wall Street to fund the recovery by injecting private capital - not taxpayer dollars - into the financial markets. Easing tax laws would prompt investors to put in their own dollars, they said.
And then John McSame swoops in tomorrow to side with his GOP buddies being all MAVERICKY.
There's very likely going to be lines around the block of WaMu depositors getting their money out NOW NOW NOW. We call that a BANK RUN, people. You'll see it on every cable news channel tomorrow morning. The GOP bailout plan will have to be passed NOW NOW NOW.
We're getting Shock and Awed.
I'm going to bed.