WaMu Banker's Pen before the stampede

Shareholders and bondholders are likely to be wiped out.   

The FDIC seized and simultaneously brokered a sale of virtually all of Washington Mutual to JPMorgan Chase & Co. for $1.9 billion.

FDIC Chairman Sheila Bair on a conference call said WaMu “was under severe liquidity pressure”. WaMu stock had fallen to $1.69 at the close Thursday, after a 52 week high of $36.47.  Standard & Poor’s downgraded the bank’s rating Wednesday, which was seen as a sign of imminent collapse.

WaMu was the largest savings and loan in the United States with $307 billion in assets.  The customers of the Seattle based bank are unlikely to be affected, as the account holders are guaranteed by the FDIC up to $100,000.   JPMorgan is absorbing at least $31 billion in losses on troubled mortgages and credit loans.