WaMu Falls on Rescue Plan; TD Said to Mull Making Bid [View All]

Source: Bloomberg.com

Sept. 22 (Bloomberg) -- Washington Mutual Inc., the lender that put itself up for sale last week, fell 22 percent in New York on concern a $700 billion government-sponsored bank bailout plan won't erase enough of its soured mortgages to lure bidders.

``There could be an in-limbo case, where potential buyers are unwilling to take on WaMu's troubled mortgage book until issues are ironed out,'' CreditSights Inc. analyst David Hendler wrote in a note to investors today. ``But the company needs to raise incremental capital in the meantime.''

Toronto-Dominion Bank joined JPMorgan Chase & Co., Citigroup Inc., Wells Fargo & Co. and Banco Santander SA as potential bidders for WaMu, and talks extended through the weekend, according to a person familiar with the matter. While bidders are primarily interested in WaMu's 2,300 branches and $143 billion in retail deposits, they must also contend with up to $19 billion in mortgage losses during the next 2-1/2 years.

Read more: http://www.bloomberg.com/apps/news?pid=20601103&sid=aqcG4FCumuXw&refer=us

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Great. Looks like we've got a high-stakes game of "chicken" going on here. "Investors" are threatening to let more banks fail if they don't like the bailout terms. And I fear it will be a rerun of "The Corporate Congress Critter Always Blinks First."