downtoearth

Kicking People Out - Cramer's Stop Trading! (9/24/08)

WaMu isn't going anywhere (but it could be sold).

With all the recent bad news about it, WaMu's retail deposit base must have been diminished enough so that by now, If the FDIC had a mind to take it over (since it is watching it "closely"), it would have done that by now. Why hasn't it? Again, why hasn't it?

This delay tells volumes.....

Add to this the following:

If the TARP program is passed (which it will be now, because if it isn't, and after what the president and Buffet and Paulsen and Bernanke said today, there will be a bank run for sure), the FDIC will NOT shut-down WaMu. If they did grab WaMu after TARP is passed, it would be the biggest political disaster and embarassment for Congress (let alone the President) (i.e "we just committed your money to a "fix", but, sorry, the biggest Thrift failed anyway??? Ouch, and then another bank run for sure.

Now the contenders: Goldman Saks? Think about it. GS is now a new "retail" bank which needs retail outlets and would no doubt like expansion potential; and has new capital; Does Warren really have his sights on another west coast banking franchise?

Or how about that Spanish bank (the name escapes me presently). WaMu's numerous branches are in California, Florida, and Texas. See a pattern? One which a "spanish" bank might find attractive?

And I could go on.

But the bottom line is that WaMu will not be grabbed by the FDIC (nor will its share price therefore be reduced to zero) at this point in time. Such would not only be a financial and economic disaster, but even more significantly now, a political nightmare as well.

But what's going to be the ending value? What will be the sales price?

Hmmmmmm

Mike