To The Honorable Judge Mary F. Walrath
I would like to begin by stating that I am a pre-seizure shareholder of Washington Mutual and for the last 18 months have been following this case and the overall market very carefully. I would like to bring a few articles to the attention of the court in hopes that they provide some insight and possibly have some impact in bringing all sides together so that a FAIR global settlement can be obtained. The intent of this letter is not to finger point or cast blame on any party involved, it is merely provided to show that a great number of people truly understand what happened in 2008 and that we look to obtain some sort of justice that will allow us to move forward with our lives.
The first article written in the year 2002 by Jim Jubak, discusses JP Morgan’s derivative exposures and how such exposure could become problematic to the entire financial system. The article highlights how JP Morgan held $26 Trillion worth of derivatives and that under a worst case scenario could lead to “an outright failure or simply a near-failure that requires a Federal Reserve-led buyout, an event that would certainly send shock waves through the financial markets.”
Now forwarding to 2008, the next article from the UK Telegraph continues to describe the derivatives market and how it BECAME time for the Federal Reserve to intervene as some financial institutions were unable to control their losses and ultimately collapsed. The article cites JP Morgan’s exposure as $90 Trillion dollars ($77Trillion + $13 Trillion from Bear Stearns). One can infer that if $26 Trillion was considered market threatening in 2002, $90 Trillion would be unfathomable in 2008 and that the losses from such gambles could be staggering.
Continuing along the lines of government intervention, on September 25th 2008 the assets of Washington Mutual were sold to JP Morgan for $1.9 Billion. The seizure of the 100+ year old institution sent shockwaves throughout the financial system, and DAYS LATER the United States Government was forced to enact the Troubled Assets Relief Program. Had Washington Mutual been allowed to survive just one more week, it would have been given a chance to participate in the program and JP Morgan would have not been able to purchase the bank’s $300 Billion worth of assets for just $1.9 Billion.
Washington Mutual would not be the only bank to be threatened with seizure a week before the October 3rd passage of TARP. On September 28th, the FDIC made an agreement with Citibank to have Citibank purchase Wachovia for $2.1 Billion or $1.00 per share. The FDIC under this plan would backstop most of the losses Citibank would suffer and would in turn; pass the losses of the deal onto taxpayers. This deal fell through when Wells Fargo offered to buy Wachovia, and its $312 Billion loan portfolio for $15 Billion ($7.00/share), and more importantly, at no cost to taxpayers. Citibank immediately filed a lawsuit against Wells Fargo, but the suit was later dismissed.
The fallout of the failed Wachovia takeover leads me to my next articles, written by Martin Weiss and Tim Iacono. The articles were written in November of 2008 and mention how Citibank had the third highest derivative exposure at $37.1 Trillion. They also mention how Citibank, not one month after the failed takeover of Wachovia, required the government to provide a $300 Billion backstop for their failing portfolio. One can only speculate if JP Morgan would have been handed a similar fate if their bid for Washington Mutual had fallen through.
Instead we get a shareholder letter written by Jaime Dimon praising the company he runs. Mentioning that not only were they able to weather the financial storm, they were able to prosper from it. Dimon writes about 2009, “Our revenue this year was a record $100 billion, up from $67 billion in 2008. The large increase in revenue was due primarily to the inclusion for the full year of Washington Mutual (WAMU) and the dramatic turnaround in revenue in our Investment Bank.”
It is clear that both JP Morgan and Citibank overextended themselves. Both banks suffered great losses as a result of the financial crisis of 2008. But for one of these banks to have come out of the crisis stronger AND demand further compensation from their Washington Mutual takeover is beyond comprehension. Every shareholder involved in the Washington Mutual bankruptcy case knows why the bank was taken over, and rest assured it was not due to a “bank run” or liquidity issues as both the FDIC and JP Morgan have admitted to as much in court, but rather to help support another financial institution.
Again, this letter is not meant to finger point or cast blame on any party involved, it is merely provided to show that a great number of people truly understand what happened in 2008 and that we look to obtain some sort of justice that will allow us to move forward with our lives.
Thank You,
dARYL
Pd: Juanirayo... se me fue el dato no se en que estaba pensando jajajaja
