JP Morgan Buys Washington Mutual

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WASHINGTON -(Dow Jones)– JPMorgan Chase & Co. (JPM) acquired Washington Mutual Inc. (WM) via a bidding process, after the thrift became the biggest bank failure in U.S. history, regulators announced late Thursday.

“With insufficient liquidity to meet its obligations, WaMu was in an unsafe and unsound condition to transact business,” the Office of Thrift Supervision said in a release.

The Federal Deposit Insurance Corp. took over as receiver of the thrift and held a bidding process that resulted in the takeover by JPMorgan, it said.

JPMorgan said in separate releases that it would pay the FDIC about $1.9 billion for all deposits, assets and certain liabilities of Washington Mutual’s banking operations. It also plans to sell $8 billion in common stock.

That payment means the FDIC’s national deposit-insurance fund won’t take a hit from WaMu’s demise, said FDIC Chairman Sheila Bair in a conference call with reporters.

“There will be no cost to the deposit insurance fund,” she said.

The acquisition of the $307 billion thrift marks the latest upheaval in the U.S. financial crisis that has claimed some of the biggest firms Wall Street this month, including government bailouts of insurer American International Group Inc. (AIG) and mortgage giants Fannie Mae (FNM) and Freddie Mac (FRE).

The Seattle-based company, which has been wracked by heavy losses in the mortgage crisis, suffered outflows of deposits totaling $16.7 billion since Sept. 15, the OTS said. WaMu, the largest savings association overseen by the agency, had more than $188.3 billion in deposits as of June 30, with 2,200 branch offices in 15 states.

“The housing market downturn had a significant impact on the performance of WaMu’s mortgage portfolio and led to three straight quarters of losses totaling $6.1 billion,” OTS Director John Reich said in the release, saying that conditions had deteriorated in the last three months.

The ownership change won’t impact the bank’s depositors or other customers, the OTS said, with branches scheduled to open Friday as usual.

However, while senior debt holders will have first claim to any asset recovery, shareholders could be wiped out.

-By Tom Barkley, Dow Jones Newswires; 202-862-9275; tom.barkley@dowjones.com

Paul Krugman With Bill Maher : "We Need Better Government"

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Florida Man Drops a Dime on Governor Elliot Spitzer; Tells F.B.I. About Sex

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Posted on Fri, Mar. 21, 2008

Beach man told FBI of alleged Spitzer sexscapades

BY AMY DRISCOLL

Almost four months before Gov. Eliot Spitzer resigned in a sex scandal, a lawyer for Republican political operative Roger Stone sent a letter to the FBI alleging that Spitzer ”used the services of high-priced call girls” while in Florida.The letter, dated Nov. 19, said Miami Beach resident Stone learned the information from ”a social contact in an adult-themed club.” It offered one potentially identifying detail: the man in question hadn’t taken off his calf-length black socks “during the sex act.”

Stone, known for shutting down the 2000 presidential election recount effort in Miami-Dade County, is a longtime Spitzer nemesis whose political experience ranges from the Nixon White House to Al Sharpton’s presidential campaign. His lawyer wrote the letter containing the call-girl allegations after FBI agents had asked to speak to Stone, though he says the FBI did not specify why he was contacted.”Mr. Stone respectfully declines to meet with you at this time,” the letter states, before going on to offer ”certain information” about Spitzer.

”The governor has paid literally tens of thousands of dollars for these services. It is Mr. Stone’s understanding that the governor paid not with credit cards or cash but through some pre-arranged transfer,” the letter said.

”It is also my client’s understanding from the same source that Governor Spitzer did not remove his mid-calf length black socks during the sex act. Perhaps you can use this detail to corroborate Mr. Stone’s information,” the letter said, signed by attorney Paul Rolf Jensen of Costa Mesa, Calif.

The letter also notes that while Stone believes the information is true, he ”cannot swear to its accuracy” because it is second-hand.

James Margolin, a spokesman for the FBI’s New York office, would not say whether the bureau had received the letter. A spokeswoman for Spitzer also had no comment.

The letter was written several months after allegations were leveled at Stone that he had left a threatening phone message at the office of Bernard Spitzer, the ex-governor’s father, regarding ”phony” campaign loans involving his son’s unsuccessful 1994 bid for attorney general. Stone denied making the call but resigned as a consultant for state Senate Republicans in Albany.

Spitzer, the crusading attorney general who became governor, resigned March 12 amid allegations he was a client of a high-paid prostitution ring, the Emperors’ Club. Four people have been charged with operating the ring. Spitzer has not been charged. A federal affidavit described a rendezvous between Spitzer and a prostitute known as Kristen, since identified as Ashley Alexandra Dupre, at the Mayflower Hotel in Washington on Feb. 13.

One of Stone’s lawyers, Fort Lauderdale attorney Robert Buschel, said the letter’s release is an attempt to set the record straight about Stone’s possible part in the Spitzer drama. Stone confirmed the letter and referred The Miami Herald to his lawyer for comments.

”The conspiracy enthusiasts on the Internet are going wild over Roger Stone’s role in the fall of Eliot Spitzer. We felt it was important to lay out for the public exactly what Mr. Stone did tell the government,” said Buschel, a partner in Rothstein, Rosenfeldt, Adler of Fort Lauderdale.

Stone works as a partner in a separate public affairs and consulting company with the same name — Rothstein, Rosenfeldt, Adler — in the same office as the law firm.

”We trust this information was helpful to federal authorities in making their case against Mr. Spitzer,” Buschel said.

Beach man told FBI of alleged Spitzer sexscapades – 03/21/2008 – MiamiHerald.com

Sirius-XM Merger Approved by Justice Department

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Justice Department gives thumbs up to satellite radio merger more than one year after it was first announced.

CNN/MONEY

March 24, 2008: 4:21 PM EDT

In its decision, the Department of Justice determined that an XM-Sirius merger was not anti-competitive. The Justice Department argued that other media companies such as Clear Channel (CCU, Fortune 500), CBS (CBS, Fortune 500), or even Apple (AAPL, Fortune 500) with its iTunes software and iPod music player served as alternate options for music and media customers.

The Department of Justice did not place any conditions on the merger.

“Since we determined that there was no competition between the companies, we did not need to set any conditions as such,” said Assistant Attorney General Thomas Barnett during a conference call with reporters Monday afternoon.

But the Federal Communications Commission must also approve the deal. The FCC has yet to make a decision on the merger and it could decide to place conditions on the deal. A spokesperson for the FCC was not immediately available for comment.

Since Sirius and XM are still awaiting approval from the FCC, it is unclear exactly what a merger would mean for consumers. Both companies charge their customers a $12.95 per month subscription fee for their most basic packages. Some have feared that if Sirius and XM are allowed to merge, the two companies would raise the monthly price.

However, the companies said last year that they would be willing to offer a so-called “a la carte” price plan where consumers could pick certain packages for less money.

The merger would combine the nation’s only two satellite radio companies and create a company with about 14 million subscribers. It would bring together Sirius’ most well-known content, including shock jock Stern and National Football League games with XM’s Major League Baseball as well as programming from Oprah Winfrey.

Currently, subscribers for either Sirius or XM can only receive broadcasts from one of the two services with their satellite radios. But in a statement Monday, XM reiterated that radios owned by its current subscribers would not need to be replaced in order to continue receiving programming.

Shares of XM (XMSR) and Sirius (SIRI) both rose after the announcement.