I work in finance, I'm pretty familiar with what's going on. They definately won't close until any chance they have of selling the company is gone. Right now it looks like either Citi or Wells are considering buying them. In the past 8 or so months, Citi has raised 50B in capital fueling speculation that they might be buyers, especially at a huge discount. The problem is those funds are assumed to be to cover additional losses coming in the 4th quarter. Also, as recent as a year ago, it was assumed that their model was flawed. They sold off Travelers Insurance and stated they wanted to get closer to their customers and focus on banking. If anything I think they will sell Smith Barney before making any more aquisitions. Wells is a posibility, but I can't see them buying WAMU completely- maybe only the retail banking, although Wells already hase a huge presence on the west, where why WAMU their biggest. WAMU was definately among the worst of the mortgage companies with their creative, pick-a-pay loans. I think the chances of a sale go way up if they are able to pawn off the bad debt to a government trust and only sell the good assets. Although if they are able to get rid of the bad mortgages, why would WAMU even want to sell, especially at such a cheap price. They haven't been rumored to be interested but with the luck BofA has has with their aquisitions of Countrywide-being able to get rid of bad debt- and Merrill- buying for almost nothing- I can see them getting a little greedy and pressing their luck on WAMU. But then they would be extremely leveraged and getting very close the the flawed Citigroup model.
The problem with any of those companies buying WAMU is branch %. Unless the Fed is going to suspend their normal rules, any of them purchasing WAMU is going to have sell off a lot of branches
Right, for Citi that wouldn't be an issue but for BofA and Wells they would pretty much be buying the deposits. They've already got a branch on every corner, it wouldn't be efficient to keep most the WAMU buildings open.
FWIW WaMu was open today and I was able to take the majority of my money out and opened a new account with Wells Fargo. What I was hearing from WaMu people is that worst case scenario they get bought out and go about their business. Wells Fargo associates told me they were hearing that if WaMu isn't bought out over the weekend then they wil have their doors closed monday. Take it for what its worth
