Washington Mutual passed expiration date?

WaMu is past its expiration date
Commentary: Seattle-based thrift is headed for a steep discount
By MarketWatch
Last update: 11:44 a.m. EDT Sept. 25, 2008

NEW YORK (MarketWatch) -- Washington Mutual Inc. is kind of like that milk in the refrigerator that's a couple of days past its expiration date.
It may be fine or have gone past the point of no return. Either way, it's not long before it will be gone.

Only the bankers who have been able to dig through WaMu's (WM Washington Mutual Inc portfolio can say with much certainty how long WaMu will last and judging by their reaction, they don't like what they smell.

J.P. Morgan Chase & Co., Toronto-Dominion and Citigroup Inc. all have reportedly passed on the auction of the bank. They dropped out after conducting an inspection of WaMu's mortgage portfolio -- assets that Standard & Poor's seemed convinced Wednesday could not be sold to raise capital.

Now, under pressure from the Office of Thrift Supervision, WaMu is looking for a private equity investor and has opened talks with the Carlyle Group and Blackstone Group LP about a capital infusion.

Should that fail, WaMu issued a statement Wednesday reminding its customers that their $143 billion in deposits are insured up to $100,000. WaMu is also getting desperate, offering 4% interest -- more than twice the national average -- on deposits made online.

If any deal occurs, expect buyers to take on a small part of WaMu - its branches, mortgage offices and deposits -- the rest of the bank is going bad and investors run the risk of getting sick.

- David Weidner
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