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Jon Talton

Analysis and commentary on economic news, trends and issues, with an emphasis on Seattle and the Northwest.

Topic: Washington Mutual

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January 8, 2014 at 10:08 AM

It’s always something: The Russell rumor

Russell Investment is headquartered in downtown Seattle in the building at center. (Photo by Mike Siegel / The Seattle Times)

Russell Investments is headquartered in downtown Seattle in the building at center. (Photo by Mike Siegel / The Seattle Times)

On Tuesday, Reuters reported that Northwestern Mutual Life Insurance is exploring the sale of Russell Investments, which moved from Tacoma to downtown Seattle during the recession, helping to fill the crater left by the implosion of Washington Mutual.

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October 28, 2013 at 10:53 AM

The costly story of JPWaMu

“Time wounds all heels,” or so the saying goes. The big news lately has been JPMorgan Chase’s $13 billion settlement with the government, and in the case of the London Whale trading disaster, the Too Big To Fail institution was forced to admit wrongdoing.

In the story during and immediately after the Panic of 2008, the House of Morgan under Jamie Dimon was the one big bank that did things right. No wonder it could acquire Washington Mutual after it failed. But the whale episode, which occurred in 2012 and cost $6 billion, showed that all was not actually well inside the bank.

Now it turns out that even the neat tale of how Dimon was smart enough to avoid the trap of subprime mortgages was untrue.

According to the Wall Street Journal, before the crash JPMorgan “dealt with some of the biggest subprime lenders of the time, including Countrywide Financial Corp., Fremont Investment & Loan and WMC Mortgage, a former unit of General Electric.”

It was bundling subprime loans and selling them as securities, including to Freddie Mac, the government-backed agency that had to be saved with $100 billion in taxpayer money.

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0 Comments | More in Banking | Topics: JPMorgan Chase, Washington Mutual

October 17, 2013 at 10:25 AM

Being Jamie Dimon: A little tougher now

I am told that Jamie Dimon was in town for a private talk at the Washington Athletic Club. And I am shocked, shocked, to have been left off the invitation list, after all those years when Dimon wanted to talk to journalists and let us hear his fun, intense, informative, profanity-laced monologues on banking and the economy.

One can guess that the more than 3,400 Seattle employees fired when JPMorgan Chase bought Washington Mutual didn’t come up. Bad form, you know.

These are difficult days for the man who was once “America’s least hated banker.” Last month, the House of Morgan agreed to pay more than $920 million to settle with the Securities and Exchange Commission, Federal Reserve, Comptroller of the Currency and U.K. regulators over the “London Whale” trading gambling fiasco that cost some $6 billion. The SEC reportedly refused to negotiate the fine, impudence to a banker who had led the Dodd-Frank framers around by their noses.

Now the bank has agreed to pay another $100 million in fines to the Commodity Futures Trading Commission and admit its traders acted “recklessly.” A Justice Department investigation continues.

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0 Comments | More in Banking | Topics: Jamie Dimon, London Whale, Washington Mutual

September 25, 2013 at 10:41 AM

Five years later, WaMu’s collapse remains an outrage

A few days ago, newspapers and the blogosphere were full of stories about the fifth anniversary of Lehman Brothers’ collapse. The more significant date for Seattle is today, when federal regulators seized and closed Washington Mutual resulting in the biggest banking failure in American history. WaMu’s assets were sold to JPMorgan Chase and 9,200 jobs were cut, including 3,400 at the giant thrift’s downtown Seattle headquarters. Shareholders were pretty much wiped out. The city lost its standing as a major financial center, no small thing in a financialized economy. And the blast wave spread out into the firms that were WaMu vendors, civic assets supported by WaMu, and scores of downtown retailers that depended on business from the highly paid headquarters employees.

Naturally, the executives who wrecked this 119-year-old institution — which had survived the Great Depression and the savings-and-loan collapse — got away with it. Kerry Killinger, the chief executive who presided over the dangerous subprime calamity, and was compensated handsomely for it, is even turning up around town again. Wall Street, which encouraged WaMu to keep shoveling subprime loans that could be bundled into securities, is doing better than ever. Move along, nothing to see here.

But there is. No justice, no peace of mind.

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