Stock Market Information

Even as the tension increases in congress for a deal to be reached, the financial sector continues to worsen. In it’s latest collapse, Washington Mutual faced bankruptcy before the FDIC seized it. It was later sold off to JPMorgan for $1.9 billion dollars.

Washington Mutual has been one of the largest banks in the country and was originally founded in 1889. It’s failure is unquestionably the largest ever in United States history. It had roughly $307 billion in assets at the time of it’s collapse, far exceeding the Illinois National Bank that failed with $40 billion in 1984, and the $32 billion that Indymac failed in July.

Thankfully the sale to JPMorgan means that WaMu won’t deplete the FDIC’s insurance fund, which was originally feared. Given the bank’s relatively terrible balance sheet,JPMorgan is expected to write fown just aobut $32 billion of the bank’s mortgage portfolio. That could change, depending on the verdict of the government bailout.

WaMu has been, and was right up until it went under, under severe liquidity pressure. It’s stock had been seriously crushed, plummeting 95 percent from it’s 52 week high. It also suffered a recent ratings downgrade from Standard & Poor’s that pushed it over the edge of collapsing.