From TimesOnline:
The US Government has asked big banks, including HSBC, to put together a rescue buyout of Washington Mutual, the American lender, according to a report.
The banks involved include Wells Fargo, JPMorgan Chase and HSBC but the report in the New York Post said that no deal talks were being held between the banks and WaMu.
Shares in WaMu, which is America's largest savings and loan institution, have plunged by 49 per cent over the past month and 83 per cent this year. Its shares today fell by a further 10.17 per cent to $2.12.
I still have a running bet that Washington Mutual will fail or get bailed out (which is now a Government Insured Epic Fail) by this Sunday. No financial institution can survive with a Junk rating and $2.00 stock. But my glee at the failure of one of the sloppiest and greediest banks I've ever dealt with personally is quickly contained by the fact that a failure of Washington Mutual puts the FDIC in serious peril.
As this article in Mother Jones reminds us:
Next to potentially require government intervention is Washington Mutual, the nation’s sixth largest bank with some $143 billion in deposits, which hangs by a thread. When—not if—it goes, the government is committed to protecting its depositors through the Federal Deposit Insurance Corporation. According to one estimate in The New York Timeson Wednesday morning, paying off Washington Mutual depositors could eat up half the FDIC's reserves, which currently stand at $45.2 billion.
The failure and/or Bailout of Washington Mutual and the coming bailout of FDIC is the proverbial car wreck in slow motion. We know that it is going to happen. We see that is happening. Yet we can't stop it. And we can't ignore it.
But have no fear ... John McCain will appoint a commission! With Chairmen and Ribbons!