Standard & Poors Equity Research reaffirmed its hold rating on the stock, but said that despite the dilutive effect it would have, the potential capital injection is positive for the bank, given its fourth-quarter Tier-1 capital ratio of 8.30%, which was below its peers. However, with WaMus loss allowance at only 42% of nonperforming loans, S&P said it expects additions to loss provisions in the quarters ahead to be significant.
Richards said on Monday that his firm is monitoring 150 to 200 companies that will likely file for bankruptcy protection from creditors over the next 12 to 18 months. The default rate on high-yield debt will likely jump to 8% in the next year, he added.
The doors stay open for another few weeks while lots people loose there jobs. I sure hope senior management stays since the have done such a great job so far.
OT There is an amazing chart on the latest John Mauldon newsletter blog of the Conference Board CEO survey vs earnings. It that chart holds true we are in for a very rough patch in earnings.
-- Fannie Mae and Freddie Mac shares will tumble to $16 or less, Goldman Sachs Group Inc. says. At Lehman Brothers Holdings Inc., analysts are telling their clients the shares will soar to $45 or more.
"That is a lot water puring in their soup, hope shares holder would love it."
Like when Oliver walks into the kitchen and Lisa Douglas is boiling a pot of water, which she tells Oliver is soup. He rolls his eyes at Lisa's obliviousness, and just then Eb walks in, smells the pot and says "Oh boy, Mrs. Douglas! Hot Water Soup! My favorite!"
Dole Food Co., the world's largest fresh-fruit and vegetable producer, is selling land in Hawaii and California to avoid default on $350 million in bonds.
Banana-shipping costs are also pressuring Dole and other producers. From January 2006 to December 2007, prices rose 76 percent in Rotterdam for the most widely used ship bunker fuel, IFO 380. Transportation and packaging make up 40 percent of Dole's costs, Norfleet Taylor said.
I wonder when people are going to clue into the fact that the earnings power of financials has been massively reduced? Between equity dilution to raise new capital, business models that are no longer profitable and, no doubt, a tighter regulatory regime going forward, I don't think the 25% decline in financials from last year's peak comes close to reflecting this. Probably 40 - 60% is more realistic.
When Michael Dell returned to the CEO slot in January 2007, the company's workforce had ballooned by 65% to about 91,500 workers.
"We grew our workforce in anticipation of growth that never materialized," Dell CFO Don Carty explained to analysts Thursday. "We were slow to correct for that."
To address those costs, Dell is taking aggressive steps, including closing facilities and trimming about 10% of the company's workforce, which will amount to about 8,800 employees being laid off. Earlier this week, the company announced it will close a manufacturing plant in Austin, Texas.
Dilution? Sort of like dumping a shot of Dewars in Lake Michigan and calling it Scotch and Water. All snarkiness aside, this is exactly what has to happen throughout the banking system. Get rid of the dividends, add new capital, even if it dilutes the heck out of existing shareholders. It is the viablity of the institutions, and their ability to lend going forward, that is important, not the fortunes of existing shareholders who made a bet and lost. The Fed and the CofC should be breathing down the necks of all the banks and related types to do the same thing.
Barley, with a DRIP that will mean that (if my maths and knowledge of the float are right) if you owned the entire float you'd now get 1/200 th additional shares.
When Michael Dell returned to the CEO slot in January 2007, the company's workforce had ballooned by 65% to about 91,500 workers.
"We grew our workforce in anticipation of growth that never materialized," Dell CFO Don Carty explained to analysts Thursday. "We were slow to correct for that."
To address those costs, Dell is taking aggressive steps, including closing facilities and trimming about 10% of the company's workforce, which will amount to about 8,800 employees being laid off. Earlier this week, the company announced it will close a manufacturing plant in Austin, Texas.
A year ago, Treasury securities made up 86% of the assets backing the creation of bank reserves. As of this past week, that share was down to 63%.
This week the main event should be the G7 Finance Ministers' meeting and consequently some rhetoric to shore up the crumbling US dollar. This could pause momentarily a downside risks to the precious metals and energy sectors. However, we continue to look for some USD weakness and Eur/usd to break the 1.60 level which would send Precious Metals and Oil to possible new all time highs.
Energies.
Last week, Oil looked to be close to break down the $98.00 level and send the Oil complex much lower but a combination of refinery outage and a softer USD propelled Oil higer a few USD away from the recent highs.
Looking at the technical picture it looks like Oil will retest the highs but we maintain our view that gains are due mainly through USD weakness. On the trading side, we prefer to warn that with the US economy entering recession we could see some increase volatility and brutal corrections as it happened before.
The Port of New Orleans enters the second quarter with a challenge: steel imports are off dramatically with the end of the downward spiral nowhere in sight. "The problem is the weakness of the dollar," said Port spokesman Chris Bonura. "Anyone wanting to import steel into the United States today not only has to pay for the steel itself as well as its transportation, but also for the difference in the exchange rate between the dollar and the euro, which right now is not in our favor. The exchange rate for a U.S. dollar was $1.56 in euros last Tuesday.
U.S. mills and manufacturers have been holding off on steel purchases until the dollar rebounds a bit so steel imports in dropped in late 2007 and early 2008.
The American Iron and Steel Institute reports steel import applications declined 8 percent from 2.3 million to 2.5 million from January to February. Annualizing steel imports for the first two months of this year at 29.9 million means a 10 percent decline from last year's 12-month total of 32.8 million.
The trend is reflected on the New Orleans docks: although general cargo was up to 9.4 million tons in 2006 -- the strongest number since before Katrina -- there were only 7.4 million tons in 2007, a drop of 21 percent.
"There is no question that the Port, despite its many assets and expansions in recent years, is facing great challenges right now," said Asaf Ashar, a professor of research at the University of New Orleans' National Ports and Waterways Institute.
The Companys Articles of Incorporation currently provide that the number of directors will be fixed by the Companys Bylaws and divided into three classes.
Re: Washington Mutual Inc., the biggest U.S. savings and loan, dropped $1.25, or 9.5 percent, to $11.90. The company said it may post a $1.1 billion loss in the first quarter and plans to cut its quarterly dividend to 1 cent, from 15 cents, preserving $490 million of capital annually.
In the capital raising transaction, the company sold approximately 176 million shares of its common stock at a purchase price of $8.75 per share. In addition, the company issued an aggregate of approximately 55,000 shares of contingently convertible, perpetual non-cumulative preferred stock at a purchase price and liquidation preference of $100,000 per share. After receipt of certain approvals, including approval of the company's shareholders, the convertible preferred stock will automatically convert into the Company's common stock at an initial exercise price of $8.75 per share, subject to adjustment.
In addition, certain investors who agreed to transfer restrictions on their shares will receive warrants, which, upon obtaining certain approvals, will become exercisable for common stock based on a post-closing reference price. These warrants have a term of five years.
The company intends to call a special shareholders' meeting to increase the number of common shares available for issuance under its articles of incorporation and to approve conversion of the preferred stock into common stock. Further details about the private offering and the terms of the securities will be available in the company's Form 8-K to be filed with the SEC.
Washington Mutual, Inc. (NYSE:WM) announced today that it entered into definitive agreements to raise an aggregate $7 billion through direct sale of equity securities to an investment vehicle managed by TPG Capital (TPG), and to other investors, including many of WaMu's top institutional shareholders. TPG's investment vehicle, as anchor investor, will purchase $2 billion in newly-issued WaMu securities.
On Jan. 3, 2007, the company entered into an accelerated share repurchase agreement with a dealer, buying back $2.7 billion of its common stock ( Stock close to $ 40 )
The Casey Serin Short Index* continues to perform.
*The Casey Serin Short Index (CSSI) seeks to make market short trades in any public traded company associated with Casey Serin. Top short positions include WM and JMBA.
A friend of mine, journalist Wanye Madsen, has reported on a text circulating in Washington called the "C and R Document." He receives lots of leaks, is very reliable and considers his source rock solid, although he has not personally seen the confidential document. Evidently Pelosi has seen it. The C stands for the conflicts with other nations that could arise should the U.S. default on its debt. The R stands for the revolution that might result from trying to stick U.S. taxpayers with the bill. WSJ reported last year that Treasury has meltdown scenarios, but without details. These may not come from Treasury. Madsen surmises these two scenarios may have been a final warning from David Walker.
This reminds me of the BAC bail out of Countrywide. The first one, not the second and final one. They bought a couple billion dollars of CFC at something like $18 when CFC was trading in the 20's. Seemed like a good deal until a few months later when CFC went to $4.
Ok, this is maybe OT, but gets back to my topic of pension fund abuse -- related to DOL granting exemptions to prohibited transactions by underwriters, which allow pension funds to trade out cash to hedge funds.
Be that as it "may" be, this current WAMU deal with a private equity company "and partners" does something which is bothersome, i.e, it is another step towards taking banking into the newly charted waters of non-regulated, non-regulated travels into shadows and darkness, where common shareholders will know less and less about the banks they do business with!
This opening up of pandoras box should send up red flags for regulation, FTC antitrust issues, pension issues and the actual conditions related to why a bank like WAMU was in such poor shape, as FED regulators, once again looked the other way, as they did with Bear Stearns et al. This seems to be a new wave of distorted financial collusion which is morphing public banking into a shadow group of hedge fund owned derivative dealers that will swap pension cash for shareholder liquidity. Let the dumbass retarded buyers beware!
TPG is among the "megafunds" in the private equity industry as well as one of the four most elite players (TPG, The Blackstone Group, KKR, and The Carlyle Group). TPG is also known for its deep operating capability and consistently high returns over the course of its existence.
KKR Financial Holdings (KFN.N: Quote, Profile, Research), the listed affiliate of private equity group Kohlberg Kravis Roberts & Co [KKR.UL], has delayed repayment of billions of dollars of commercial paper for the second time and begun a new round of talks with creditors, the Financial Times said on Wednesday. The paper said KKR Financial Holdings said in a regulatory filing that it had begun talks with creditors and deferred repayment of a chunk of debt due last Friday.
Kohlberg Kravis Roberts has closed its global buyout fund, dubbed KKR 2006, on approximately $17.6 billion (11.2 billion), according to a source close to the buyout firm.
The fund has been marketed for at least two years and has garnered commitments from limited partners including the Oregon Investment Council, the Pennsylvania State Employees' Retirement System and KKR Private Equity Investors, the buyout firm's Euronext-listed investment fund.
KKR 2006 will invest primarily in large cap companies in North American and European markets, making equity investments ranging from $150 million to $600 million, according to January 2006 minutes from the Oregon pension.
Texas Energy Future Holdings
Limited Partnership (TEF) -- the holding company formed by Kohlberg Kravis
Roberts & Co. (KKR), Texas Pacific Group (TPG) and other investors to
acquire TXU Corp. -- and TXU Corp. (NYSE: TXU), today announced that upon
close of the transaction, TXU Energy, the retail subsidiary of TXU Corp.,
will deliver an unprecedented price cut totaling 15 percent for most
residential customers compared to the prices in effect when the merger was
announced.
The one thing missing from the PR is the coupon rate of the convertible preferred and the condition that shareholder will vote to allow for the coversion. The 8K should be an interesting read.. As of now, this is a terrible deal to exisitng shareholder. The book value (even thought questionable) used to be 20+. Now with the dilution, it will be in the 15 or so +- after factor in the 7B cash (after conversion). And the book is questionable as best..But on the upsid, it does take away the possibility that FDIC will need to move in anytime soon. So WM has time to let the mortgage mess to play out and see how much their book is really worth and let the steep yield curve provided by the Fed to work wonder on it's earning before write off..
the optimism on the market is unreal. I think insiders knew about the shape of the TPG deal on friday - the stock plunged to $10 (still above the offer price) on no real public news.
then the WSJ leaked the deal sans details and wamu shot up above $13 on monday and the longs crowed.
now the details show the dilution and the preferred shares and the poor price, and the stock is still way above fridays close.
At least it's raining out, as this is going to take longer than I thought:
(3) ACQUISITION OF INSOLVENT SAVINGS ASSOCIATIONS.--
(A) IN GENERAL.--Notwithstanding any other provision of this Act, any qualified savings association which became a federally chartered stock company in December of 1986 and which is acquired by any bank holding company without Federal financial assistance after June 1, 1991, and before March 1, 1992, and any subsidiary of any such association, may after such acquisition continue to engage within the home State of the qualified savings association in insurance agency activities in which any Federal savings association (or any subsidiary thereof) may engage in accordance with the Home Owners' Loan Act and regulations pursuant to such Act if the qualified savings association or subsidiary thereof was continuously engaged in such activity from June 1, 1991, to the date of the acquisition.
I think WaMu has to dump The FDIC guarantee "thing" as they are now owned by a non bank entity!
Accounts at Bear Stearns, an investment bank that does not cater to consumers, are not insured by the FDIC. But JPMorgan Chase (JPM), which plans to buy Bear, has assured Bear's customers it will guarantee all the bank's business. If Bear were to fail, customers of failed brokerages are protected by the federal Securities Investor Protection Corp., which can restore investor assets held by financially troubled firms.
Re: ""Like all financial institutions, WaMu recognizes that customer concerns may arise given the level of noise in the marketplace. As questions or concerns arise, we address them and believe it's important to reinforce that 1) WaMu has the liquidity and capital strength to manage through this period of marketplace volatility; and 2) that deposits with WaMu are insured to the limits established by the FDIC."
If depositors need further reassurance, they can look at regulators' intervention in putting together a rescue package for investment banker Bear Stearns. Whatever one's opinion of that deal -- and Isaac says he has some reservations about it -- "it's a very powerful statement of the lengths the government is willing to go to to keep the system from careening out of control."
While deposit runs can be short and dramatic, they can also be quiet and spread out over weeks. One difficulty in determining what's going on is that deposit data are often a poor indicator of underlying trends. Deposits can fluctuate by season. Banks that don't need as high a level of deposits to fund loans, because of reduced demand, or find a cheaper source of funding, may reduce the rates they offer and let deposit levels drop as CDs mature and customers look elsewhere for a higher yield.
"I think WaMu has to dump The FDIC guarantee "thing" as they are now owned by a non bank entity!"
Have you look at CFC capital sturcture at all? there are plenty of banks that is own by a non-bank structure... And there are plenty of privately owned banks. What does that have anything to do with FDIC? I have sympathy on you account if you invest base on what you talk about..
"In recent weeks readers have called and e-mailed with increasing frequency, asking, "Is my money safe in Washington Mutual? What happens if the company gets bought? Should I keep my money there?"
The answer is emphatically yes, your money is safe, no matter what happens. The Federal Deposit Insurance Corp. guarantees deposits up to $100,000 per person per institution, and up to $250,000 for certain types of Individual Retirement Accounts."
7 million should be more than enough for 1 year....
So the reports of a $5 billion infusion were 'false'... $7 billion is the new $5 billion I guess.
billion... not million...
that said, the concept is still true
They have 880 Million shares and just added 176 Million.
That is a lot water puring in their soup, hope shares holder would love it.
Market cap 11 billion just diluted by 7 billion, slashes dividend, posts loss and the stock is off 8%? Irrational doesn't begin to cover it.
Good money chases bad.
Hmm...
David Faber on CNBC has different details.
Here's what he said
-176 million shares sold at $8.75/share
-$5.5 Billion o fpreferred shares convertible at $8.75
-805 million shares will be issued
-this compares to the fac tthat there are currently 883 million shares.
so you get massive dilution.
So if I pawn my stereo to scrape together enough money to pay the rent, I'm getting an "infusion"?
Market cap 11 billion just diluted by 7 billion, slashes dividend, posts loss and the stock is off 8%?
Our efficient markets had it all priced in already. Move along now, nothing to see here...
Sweet, bonderman and crew are makin a double down bet.
i'm sure that qualifies for more expensive handbags and trips to china for the staff.
ac:
You're not pawning your stereo, you're getting a room mate.
Whew, glad this one is contained now.
TPG Capital - Wikipedia, the free encyclopedia
People who believed the "Bottom is in" from the news, bought yesterday at $13.5.
Bottom feeders are getting slaughtered! And it still baffles me why everyone and their grandma believes the bottom is here?
So if I pawn my stereo to scrape together enough money to pay the rent, I'm getting an "infusion"?
But I wouldn't use the word 'infusion'... sounds vulgar. Like it might contain a social disease...
WaMu shutting down retail lending ops?
WaMu
Bhoo Hoo!
any accounting sleuths want to explain the rationale behind the 1c divvy?
OT
Good News:
Pending Home Sales index from NAR. (contracts signed in Feb, not closing) for existing homes.
Fell 1.9% from January (that surprises me)
and
down 21.4% below Feb 2007
Lawrence Yun:
"The slip in sales indicates we are not out of the woods yet, an era of successive deep sales declines seems to be over"
fell:
I guess WaMu is back to being...you know a bank.
Yearning to Learn,
This is a family blog. This is a quality blog. Family blogs and quality blogs do not quote Laurence Yun except in derision.
dryfly writes:
So if I pawn my stereo to scrape together enough money to pay the rent, I'm getting an "infusion"?
But I wouldn't use the word 'infusion'... sounds vulgar. Like it might contain a social disease...
dryfly | 04.08.08 - 10:20 am
Okay, I'll fix it for ac: So if I pawn my stereo to scrape together enough money to pay the rent, I'm getting an "syphilis "?
Washington Mutual said the dividend cut will save the company $490 million a year.
How much could they have saved if they had forgone the bonuses they gave out this year?
Standard & Poors Equity Research reaffirmed its hold rating on the stock, but said that despite the dilutive effect it would have, the potential capital injection is positive for the bank, given its fourth-quarter Tier-1 capital ratio of 8.30%, which was below its peers. However, with WaMus loss allowance at only 42% of nonperforming loans, S&P said it expects additions to loss provisions in the quarters ahead to be significant.
Marathon's Richards sees best distressed opportunities for 17 yrs - MarketWatch
Richards said on Monday that his firm is monitoring 150 to 200 companies that will likely file for bankruptcy protection from creditors over the next 12 to 18 months. The default rate on high-yield debt will likely jump to 8% in the next year, he added.
The doors stay open for another few weeks while lots people loose there jobs. I sure hope senior management stays since the have done such a great job so far.
If the market starts of negative, it ends on a postive note.
Punditry writes:
any accounting sleuths want to explain the rationale behind the 1c divvy?
Punditry | 04.08.08 - 10:21 am |
Easy ... now they get to say "we have continuously paid our bagholders err shareholders a dividend for 80 years....
Wow.Sarcasm fails me.
OT There is an amazing chart on the latest John Mauldon newsletter blog of the Conference Board CEO survey vs earnings. It that chart holds true we are in for a very rough patch in earnings.
Here
The chart is about half way down.
-- Fannie Mae and Freddie Mac shares will tumble to $16 or less, Goldman Sachs Group Inc. says. At Lehman Brothers Holdings Inc., analysts are telling their clients the shares will soar to $45 or more.
"That is a lot water puring in their soup, hope shares holder would love it."
Like when Oliver walks into the kitchen and Lisa Douglas is boiling a pot of water, which she tells Oliver is soup. He rolls his eyes at Lisa's obliviousness, and just then Eb walks in, smells the pot and says "Oh boy, Mrs. Douglas! Hot Water Soup! My favorite!"
Dole Food Co., the world's largest fresh-fruit and vegetable producer, is selling land in Hawaii and California to avoid default on $350 million in bonds.
Banana-shipping costs are also pressuring Dole and other producers. From January 2006 to December 2007, prices rose 76 percent in Rotterdam for the most widely used ship bunker fuel, IFO 380. Transportation and packaging make up 40 percent of Dole's costs, Norfleet Taylor said.
Dole Food Fights Default as Chiquita Passes Murdock (Update2) - Bloomberg.com
If Dole can not afford to ship boxes filled with bananas, which commodity or product will be next? Computers, shoes, cars?
I wonder when people are going to clue into the fact that the earnings power of financials has been massively reduced? Between equity dilution to raise new capital, business models that are no longer profitable and, no doubt, a tighter regulatory regime going forward, I don't think the 25% decline in financials from last year's peak comes close to reflecting this. Probably 40 - 60% is more realistic.
WAMU will have fewer people buying anything.
When Michael Dell returned to the CEO slot in January 2007, the company's workforce had ballooned by 65% to about 91,500 workers.
"We grew our workforce in anticipation of growth that never materialized," Dell CFO Don Carty explained to analysts Thursday. "We were slow to correct for that."
To address those costs, Dell is taking aggressive steps, including closing facilities and trimming about 10% of the company's workforce, which will amount to about 8,800 employees being laid off. Earlier this week, the company announced it will close a manufacturing plant in Austin, Texas.
1 penny divy means that pension funds who would otherwise have to liquidate now only sell on the climbs.
"Priced-In" is the new black.
"If the market starts of negative, it ends on a postive note"
Fed minutes 2P today. I have a hunch that the minutes might spook the rate-cut-addicts.
Yearning to Learn > I think this is just another buyout of a different color - massive dilutuion!
I have a question - money is supposed to be tight right now, so was this backstoped by the Fed?
You're not pawning your stereo, you're getting a room mate.
Marcus Aurelius
Too funny!
Dilution? Sort of like dumping a shot of Dewars in Lake Michigan and calling it Scotch and Water. All snarkiness aside, this is exactly what has to happen throughout the banking system. Get rid of the dividends, add new capital, even if it dilutes the heck out of existing shareholders. It is the viablity of the institutions, and their ability to lend going forward, that is important, not the fortunes of existing shareholders who made a bet and lost. The Fed and the CofC should be breathing down the necks of all the banks and related types to do the same thing.
any accounting sleuths want to explain the rationale behind the 1c divvy?
Punditry | 04.08.08 - 10:21 am | #
There are some institutional investors who require that a firm pay a dividend to be allowed int eh portfolio. The $0.01 provides that fig leaf.
At least a penny can only be paid with a penny. Copper-plated zinc vs. printed paper - who ya' got?
divs are based on operating capital, aint they?
Cost effective: It will take postage money to mail out those dividend checks, yes?
Dirk van Dijk
winner
"But I wouldn't use the word 'infusion'... sounds vulgar. Like it might contain a social disease..."
Hmmm - I think this thread is on to something. Capital "infusions" are the financial analog of an std.
Of course, you only get "infusions" when you don't control "risk."
I wonder what the real world analog to "risk" would be?
Barley, with a DRIP that will mean that (if my maths and knowledge of the float are right) if you owned the entire float you'd now get 1/200 th additional shares.
Happy Days Are Here Again!!
mike q | 04.08.08 - 10:57 am
The answer is too nasty to write on this blog (even for me).
I wonder what the real world analog to "risk" would be?
In jail (like some of these ceo's should be), bent over with hands on ankles.
OT, but related to finance, costs:
When Michael Dell returned to the CEO slot in January 2007, the company's workforce had ballooned by 65% to about 91,500 workers.
"We grew our workforce in anticipation of growth that never materialized," Dell CFO Don Carty explained to analysts Thursday. "We were slow to correct for that."
To address those costs, Dell is taking aggressive steps, including closing facilities and trimming about 10% of the company's workforce, which will amount to about 8,800 employees being laid off. Earlier this week, the company announced it will close a manufacturing plant in Austin, Texas.
A year ago, Treasury securities made up 86% of the assets backing the creation of bank reserves. As of this past week, that share was down to 63%.
This week the main event should be the G7 Finance Ministers' meeting and consequently some rhetoric to shore up the crumbling US dollar. This could pause momentarily a downside risks to the precious metals and energy sectors. However, we continue to look for some USD weakness and Eur/usd to break the 1.60 level which would send Precious Metals and Oil to possible new all time highs.
Energies.
Last week, Oil looked to be close to break down the $98.00 level and send the Oil complex much lower but a combination of refinery outage and a softer USD propelled Oil higer a few USD away from the recent highs.
Looking at the technical picture it looks like Oil will retest the highs but we maintain our view that gains are due mainly through USD weakness. On the trading side, we prefer to warn that with the US economy entering recession we could see some increase volatility and brutal corrections as it happened before.
Hellenic Shipping News Worldwide - Online Daily Newspaper on Hellenic and International Shipping
If Dole can not afford to ship boxes filled with bananas, which commodity or product will be next?
Perishables have a high packaging and transport cost, I assume.
OT on WamU, but background on liquidity trap:
The Port of New Orleans enters the second quarter with a challenge: steel imports are off dramatically with the end of the downward spiral nowhere in sight. "The problem is the weakness of the dollar," said Port spokesman Chris Bonura. "Anyone wanting to import steel into the United States today not only has to pay for the steel itself as well as its transportation, but also for the difference in the exchange rate between the dollar and the euro, which right now is not in our favor. The exchange rate for a U.S. dollar was $1.56 in euros last Tuesday.
U.S. mills and manufacturers have been holding off on steel purchases until the dollar rebounds a bit so steel imports in dropped in late 2007 and early 2008.
The American Iron and Steel Institute reports steel import applications declined 8 percent from 2.3 million to 2.5 million from January to February. Annualizing steel imports for the first two months of this year at 29.9 million means a 10 percent decline from last year's 12-month total of 32.8 million.
The trend is reflected on the New Orleans docks: although general cargo was up to 9.4 million tons in 2006 -- the strongest number since before Katrina -- there were only 7.4 million tons in 2007, a drop of 21 percent.
"There is no question that the Port, despite its many assets and expansions in recent years, is facing great challenges right now," said Asaf Ashar, a professor of research at the University of New Orleans' National Ports and Waterways Institute.
This is a family blog. This is a quality blog. Family blogs and quality blogs do not quote Laurence Yun except in derision.
Rob Dawg:
ROFL
Seriously though, derisiion is always implied whenever I write anything that starts with "Lawrence Yun"
I never thought there would be a bigger hack than David Lereah. Boy was I proven wrong.
TPG just got a real sweetheart deal.
WTF-they get a 33% discount and warrants to boot!? Even I'd be willing to invest in WaMu at such terms.
**
The Companys Articles of Incorporation currently provide that the number of directors will be fixed by the Companys Bylaws and divided into three classes.
Re: Washington Mutual Inc., the biggest U.S. savings and loan, dropped $1.25, or 9.5 percent, to $11.90. The company said it may post a $1.1 billion loss in the first quarter and plans to cut its quarterly dividend to 1 cent, from 15 cents, preserving $490 million of capital annually.
Terms of the Capital Raising Transaction
In the capital raising transaction, the company sold approximately 176 million shares of its common stock at a purchase price of $8.75 per share. In addition, the company issued an aggregate of approximately 55,000 shares of contingently convertible, perpetual non-cumulative preferred stock at a purchase price and liquidation preference of $100,000 per share. After receipt of certain approvals, including approval of the company's shareholders, the convertible preferred stock will automatically convert into the Company's common stock at an initial exercise price of $8.75 per share, subject to adjustment.
In addition, certain investors who agreed to transfer restrictions on their shares will receive warrants, which, upon obtaining certain approvals, will become exercisable for common stock based on a post-closing reference price. These warrants have a term of five years.
The company intends to call a special shareholders' meeting to increase the number of common shares available for issuance under its articles of incorporation and to approve conversion of the preferred stock into common stock. Further details about the private offering and the terms of the securities will be available in the company's Form 8-K to be filed with the SEC.
Washington Mutual, Inc. (NYSE:WM) announced today that it entered into definitive agreements to raise an aggregate $7 billion through direct sale of equity securities to an investment vehicle managed by TPG Capital (TPG), and to other investors, including many of WaMu's top institutional shareholders. TPG's investment vehicle, as anchor investor, will purchase $2 billion in newly-issued WaMu securities.
Vehicle...vehicles...emergencies??
Moin from Germany,
here is how not to create shareholder value....
Flashback WAMU Jan 2007
On Jan. 3, 2007, the company entered into an accelerated share repurchase agreement with a dealer, buying back $2.7 billion of its common stock ( Stock close to $ 40 )
Well done....
We are all WaMu'd now.
The Casey Serin Short Index* continues to perform.
*The Casey Serin Short Index (CSSI) seeks to make market short trades in any public traded company associated with Casey Serin. Top short positions include WM and JMBA.
Posting from rgemonitor
A friend of mine, journalist Wanye Madsen, has reported on a text circulating in Washington called the "C and R Document." He receives lots of leaks, is very reliable and considers his source rock solid, although he has not personally seen the confidential document. Evidently Pelosi has seen it. The C stands for the conflicts with other nations that could arise should the U.S. default on its debt. The R stands for the revolution that might result from trying to stick U.S. taxpayers with the bill. WSJ reported last year that Treasury has meltdown scenarios, but without details. These may not come from Treasury. Madsen surmises these two scenarios may have been a final warning from David Walker.
Written by lenny on 2008-04-08 10:40:05
This reminds me of the BAC bail out of Countrywide. The first one, not the second and final one. They bought a couple billion dollars of CFC at something like $18 when CFC was trading in the 20's. Seemed like a good deal until a few months later when CFC went to $4.
Ok, this is maybe OT, but gets back to my topic of pension fund abuse -- related to DOL granting exemptions to prohibited transactions by underwriters, which allow pension funds to trade out cash to hedge funds.
Be that as it "may" be, this current WAMU deal with a private equity company "and partners" does something which is bothersome, i.e, it is another step towards taking banking into the newly charted waters of non-regulated, non-regulated travels into shadows and darkness, where common shareholders will know less and less about the banks they do business with!
This opening up of pandoras box should send up red flags for regulation, FTC antitrust issues, pension issues and the actual conditions related to why a bank like WAMU was in such poor shape, as FED regulators, once again looked the other way, as they did with Bear Stearns et al. This seems to be a new wave of distorted financial collusion which is morphing public banking into a shadow group of hedge fund owned derivative dealers that will swap pension cash for shareholder liquidity. Let the dumbass retarded buyers beware!
TPG is among the "megafunds" in the private equity industry as well as one of the four most elite players (TPG, The Blackstone Group, KKR, and The Carlyle Group). TPG is also known for its deep operating capability and consistently high returns over the course of its existence.
KKR Financial Holdings (KFN.N: Quote, Profile, Research), the listed affiliate of private equity group Kohlberg Kravis Roberts & Co [KKR.UL], has delayed repayment of billions of dollars of commercial paper for the second time and begun a new round of talks with creditors, the Financial Times said on Wednesday. The paper said KKR Financial Holdings said in a regulatory filing that it had begun talks with creditors and deferred repayment of a chunk of debt due last Friday.
Kohlberg Kravis Roberts has closed its global buyout fund, dubbed KKR 2006, on approximately $17.6 billion (11.2 billion), according to a source close to the buyout firm.
The fund has been marketed for at least two years and has garnered commitments from limited partners including the Oregon Investment Council, the Pennsylvania State Employees' Retirement System and KKR Private Equity Investors, the buyout firm's Euronext-listed investment fund.
KKR 2006 will invest primarily in large cap companies in North American and European markets, making equity investments ranging from $150 million to $600 million, according to January 2006 minutes from the Oregon pension.
Texas Energy Future Holdings
Limited Partnership (TEF) -- the holding company formed by Kohlberg Kravis
Roberts & Co. (KKR), Texas Pacific Group (TPG) and other investors to
acquire TXU Corp. -- and TXU Corp. (NYSE: TXU), today announced that upon
close of the transaction, TXU Energy, the retail subsidiary of TXU Corp.,
will deliver an unprecedented price cut totaling 15 percent for most
residential customers compared to the prices in effect when the merger was
announced.
From CNN Money...
In fact, Mack said that Morgan Stanley is seeing opportunities in the same mortgage market that caused Wall Street's pain this year.
"I don't know if this is the bottom or close to the bottom, but at some point it will be wise to invest there," he said.
Business, financial, personal finance news - CNNMoney.com
What people fail to realize is that underwater is a relative thing, because you can always find new cliffs in the topography: Song time:
YouTube
- Under the Sea
Version 2: YouTube
- Thom Yorke (Radiohead) Cymbal Rush (live)
The one thing missing from the PR is the coupon rate of the convertible preferred and the condition that shareholder will vote to allow for the coversion. The 8K should be an interesting read.. As of now, this is a terrible deal to exisitng shareholder. The book value (even thought questionable) used to be 20+. Now with the dilution, it will be in the 15 or so +- after factor in the 7B cash (after conversion). And the book is questionable as best..But on the upsid, it does take away the possibility that FDIC will need to move in anytime soon. So WM has time to let the mortgage mess to play out and see how much their book is really worth and let the steep yield curve provided by the Fed to work wonder on it's earning before write off..
the optimism on the market is unreal. I think insiders knew about the shape of the TPG deal on friday - the stock plunged to $10 (still above the offer price) on no real public news.
then the WSJ leaked the deal sans details and wamu shot up above $13 on monday and the longs crowed.
now the details show the dilution and the preferred shares and the poor price, and the stock is still way above fridays close.
insane.
At least it's raining out, as this is going to take longer than I thought:
(3) ACQUISITION OF INSOLVENT SAVINGS ASSOCIATIONS.--
(A) IN GENERAL.--Notwithstanding any other provision of this Act, any qualified savings association which became a federally chartered stock company in December of 1986 and which is acquired by any bank holding company without Federal financial assistance after June 1, 1991, and before March 1, 1992, and any subsidiary of any such association, may after such acquisition continue to engage within the home State of the qualified savings association in insurance agency activities in which any Federal savings association (or any subsidiary thereof) may engage in accordance with the Home Owners' Loan Act and regulations pursuant to such Act if the qualified savings association or subsidiary thereof was continuously engaged in such activity from June 1, 1991, to the date of the acquisition.
I think WaMu has to dump The FDIC guarantee "thing" as they are now owned by a non bank entity!
Accounts at Bear Stearns, an investment bank that does not cater to consumers, are not insured by the FDIC. But JPMorgan Chase (JPM), which plans to buy Bear, has assured Bear's customers it will guarantee all the bank's business. If Bear were to fail, customers of failed brokerages are protected by the federal Securities Investor Protection Corp., which can restore investor assets held by financially troubled firms.
Re: ""Like all financial institutions, WaMu recognizes that customer concerns may arise given the level of noise in the marketplace. As questions or concerns arise, we address them and believe it's important to reinforce that 1) WaMu has the liquidity and capital strength to manage through this period of marketplace volatility; and 2) that deposits with WaMu are insured to the limits established by the FDIC."
Bank depositors stay calm amid turmoil
If depositors need further reassurance, they can look at regulators' intervention in putting together a rescue package for investment banker Bear Stearns. Whatever one's opinion of that deal -- and Isaac says he has some reservations about it -- "it's a very powerful statement of the lengths the government is willing to go to to keep the system from careening out of control."
While deposit runs can be short and dramatic, they can also be quiet and spread out over weeks. One difficulty in determining what's going on is that deposit data are often a poor indicator of underlying trends. Deposits can fluctuate by season. Banks that don't need as high a level of deposits to fund loans, because of reduced demand, or find a cheaper source of funding, may reduce the rates they offer and let deposit levels drop as CDs mature and customers look elsewhere for a higher yield.
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"I think WaMu has to dump The FDIC guarantee "thing" as they are now owned by a non bank entity!"
Have you look at CFC capital sturcture at all? there are plenty of banks that is own by a non-bank structure... And there are plenty of privately owned banks. What does that have anything to do with FDIC? I have sympathy on you account if you invest base on what you talk about..
From the PI article:
"In recent weeks readers have called and e-mailed with increasing frequency, asking, "Is my money safe in Washington Mutual? What happens if the company gets bought? Should I keep my money there?"
The answer is emphatically yes, your money is safe, no matter what happens. The Federal Deposit Insurance Corp. guarantees deposits up to $100,000 per person per institution, and up to $250,000 for certain types of Individual Retirement Accounts."
Ha ha ha! We are a flock of sheep, aren't we?