User 227528

WaMu: Intensification of Stealth Buying

To VeniV...

>My money is in a 24 hour money market account yielding 8%

WOW where you get that rates? I want to be there :)

WaMu and More: Uninsured Depositors Begging for Trouble

WaMu spokesman Derek Aney said in an email to CNNMoney.com that the company had "increased our available liquidity to more than $50 billion." The company previously had said that its liquidity was $40 billion as of the end of the second quarter.

money.cnn.com/2008/07/...

Hopefully this news will be all over the place on Monday to start the short squeeze windfall.

WaMu and More: Uninsured Depositors Begging for Trouble

In the post titled: “Citi, Merrill, WaMu: Death Spiral Financing” I posted a comment about how this “no brainer” shorts could create a short squeeze that may become the biggest bear trap ever!

The overselling of the stock in the past two days seems to guarantee a short squeeze if the bank isn’t seized by the FDIC this week (which isn’t as sure as you want people to beleive).

I hope your bets are covered…

As for “seeking alpha” editors: Someone needs to realize, the reputation of this site is being jeopardized by one writer who doesn’t bother to disclose his biases.

WaMu and More: Uninsured Depositors Begging for Trouble

This is not first of this kind of “analysis” from your part and it is obvious you are short on WM and WB and others, but you are not helping your cause by not disclosing this fact.

You may make a few dollars with your short positions but your credibility is being ruined by not being candid of your intentions.

If you think credibility is not important then ask yourself why those banks are being shorted and you may realize there are things more valuable than money…

Good luck with your short…

Citi, Merrill, WaMu: Death Spiral Financing

First let’s consider Mr Bonderman is not stupid and has more insight into WaMu situation than the average Joe. (You don’t throw 7 Billions into a risky business just for kicks).

Second, let’s not forget that Mr Bonderman business is into take public properties out of the market and make them private.

Third, Mr Bonderman said he has no rush to recover his investment and also has a 25 Billion war chest sitting in his lap.

The terms of the deal with Wamu seems like it was designed to be a first round of financing to take the bank completely, wait a couple of years until the dust settles and cash his way out.

Let’s assume WaMu needs 6 Billion more capital… I bet he will not commit that kind of money in a completely distressed business without some considerable discount. $3 Dollars per share will be around 30% discount of its current price so for simplification lets use that number (if the price is less than $3 the numbers will be much nicer for him) .

If that were the case Mr Bonderman will invest 13 Billons, and obtain 72% of the shares at an average price of $3.36 (the book value of the adjusted shares will be $ 7.0).

Today selloff was about 20% of the outstanding shares and most likely most of today sales were shorts, at first sight this is a no brainer short: either the company goes bankrupt and the value of the shares goes to $0 or there is a new capital injection (PLUS the “full ratchet” compensation) that will dilute the value of the shares considerably, so there is no way to lose …

But let’s remember that someone is buying at the other side of those short sales… What would happen if some of the friends of Mr Bonderman are actually buying those shares?… What would happen if Mr Bonderman does inject the needed capital AND offers to buy the remainder shares at around $ 7.0 dollars (The new book value) in order to take the company private?

Oh boy, that would be the perfect short squeeze! The mother of all Bear Traps

Mr. Bonderman friends don’t need to sell any time soon. The shares will jump in value to the $ 10’s because there wouldn’t be many shares left to sell and many of those shorters may want to cover their bets…

No matter if Mr Bonderman does indeed buy the remainder shares or not… the shares will be around $7.0 for a 100% return of his investment… And if they manage to pass the storm the bank could easily reach $ 15 in 2 or 3 years down the road…