Everyone has heard that saying before and in 999 out of 1,000 times it's true. Let's apply it here, shall we?
FDIC - It normally costs them hundreds of millions or billions of dollars to close a bank depending on the bank size. There is no other example in all of the FDIC closures where this is not true. WaMu was the largest bank "failure" in history and not only did the FDIC not spend any money doing so, they are making money on the closure.
JPM - It would normally cost tens if not hundreds of billions of dollars and take untold years to add 2,200 bank branches and credit card companies even for an existing large, well financed bank. The other option to save time, would be to buy a competitor, but it would still cost tens of billions of dollars. JPM not only saved time and money adding 2,200 branches, they are being paid to do so.
Creditors - In normal BKs, creditors are lucky to get paid half of the debt they are owed and most debt holders bought at close to par. In this case, the creditors bought the debt at pennies on the dollar, are getting paid above par with full contract interest rate, and would get the reorganized company possibly worth billions of dollars.
Do we really need three years and an army of lawyers getting paid hundreds of millions of dollars to figure this out? Call it what you will, "smell test" or too good to be true, common sense says, this can't be happening.
Very true. These are simple facts surrounding wamu BK that anyone with a little IQ should be able to comprehend.
I am sure Judge is a very smart person who understands the facts. But, she is carefully moving this BK case for an amicable settlement. I am sure she just don't want to make any decisions that could undermine the fragile financial system of USA since this "black and white" BK case involves JPM/FDIC/Treasury/SEC/Debtor as the crooks.
