Did the Feds Gift JPM another Bailout?

KOMO ^ | Sep 23, 2009 at 2:19 PM PDT | TysonMM

[seton89]

Did the Feds Just Gift JPM another $50 billion in Taxpayer Bailout Dollars! According to the Purchase and Assumption Agreement dated 25 Sept 2008, the Federal Deposit Insurance Corporation had until this past Monday to adjust to fair value, the selling price of the assets of Washington Mutual Bank. During the financial chaos of September 2008, the FDIC, in coordination with the Office of Thrift Supervision and the Federal Treasury, deemed the 100 year old bank "unfit to conduct business", and sold the assets and deposits for a hastily arranged deal with JPMorgan Chase for a questionable $1.88b. Left behind scratching their heads were a carnage of employees, shareholders, bondholders, and retirement accounts desperate for answers, considering the value of assets sold (by conservative estimates) exceeded $50b in fair value.

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[seton89]

Somebody's gonna pay for this - guess who?

[seton89]

The FDIC is now on the hook for the assets given to JPM.

[Pearls Before Swine]

In all fairness, it has to be said that a) no one knew what the assets were worth at the time, and b) although the value may be clearer now, it is by no means clear. If you were JPM, under what circumstances would you have done the deal? They were just a bit smarter than Bank of America was when it realized the valuation it had placed on Merill was very wrong.