Is wamu going out of business?

Question

Hi,

Someone told me that Washington Mutual was one of those banks that are going to be bankrupt.

Have you heard this? Is this true?

Answer 1

If not, maybe they should be.

The firm is not one of the better managed firms, and when the market was going good, they made money in spite of themselves, and now when there's belt tighting, you see the companies with good management, WAMU is not one of them

If things continue and if the get worse, some one will swoop in and buy them out, change management and most of middle management and they could turn the company

Answer 2

No, it's very rare for a bank nowadays to just go completely bankrupt. Especially a well known bank like Wamu. Even with bad management. Banks usually get bought out if they are near bankruptcy. Don't be suprise when they bounce back by end of the year. Now is a good time to buy some stock options on them, they're at their low. Buy call option out to 2009. I see a move up by 2009-2010.

Answer 3

Washington Mutual lost a lot of money on the credit crunch and on bad mortgages, however the chances of them going bankrupt are low. Washington Mutual will either be able to sell assets which it is losing money on, get a loan from the federal government or be rescued by a larger bank such as JP Morgan Chase.

Answer 4

Just my opinion...

I believe they'll be rescued by another bank, like they Bear Sterns was or Countrywide was... A bank failing isn't good for anyone.  But yes, if they don't get bought out, I think they'll fail.

Answer 5

Very very unlikely WaMu would go bankrupt. There are too many alternatives. First of all, they received over $7billion in cash from TPG. Second, while the reports from speculators cry doom and gloom, the fact is WaMu is very well diversified. Home loans is only one of their many business lines, which includes a large & profitable retail bank business, commercial, loans, and credit cards. If you look at their books, you will see significant capital and secure bottom line.

Bear Stearns was all or nothing. Chase is knee deep with Bear Stearns, and BofA has their hands full with Countrywide (who was all or nothing as well).

Their CEO came out during a round table last week indicating a very aggressive strategic plan will be introduced over the next 4 weeks. I am buying now in hopes that strategic plan is thorough and brings them back to $44 a share as it was a year ago.