Washington Mutual Still High on Radar of Bank Failure Prediction Markets

Written by:
Jagajeet Chiba
Published on:
Sep/23/2008
Washington Mutual

Washington Mutual Inc. shares fell in premarket trading Tuesday after ratings agency Moody's Investors Service cut the bank's ratings a day earlier and amid a report at least five banks are considering purchasing the embattled company.

Shares of Seattle-based Washington Mutual fell 40 cents, or 12 percent, to $2.93 in premarket trading. Washington Mutual shares closed Monday at $3.33.

Internet prediction market, Intrade.com, still gave Washington Mutual a 40 percent chance of failing though that likelihood appeared to be diminishing in the wake of a US Government planned massive bailout and several suitors on tap to acquire the troubled bank.

Washington Mutual has been among the hardest hit banks by a sharp rise in mortgage defaults since the middle of 2007. The bank has set aside billions of dollars to cover potential losses, yet Moody's expects the capital cushion to still be short of what is necessary. The "E" rating signals an increased likelihood the bank will need outside financial support.

Bloomberg, citing unnamed sources, said at least five banks are considering purchasing Washington Mutual. Among them are Toronto-Dominion Bank, JPMorgan Chase & Co., Wells Fargo & Co. and Citigroup Inc., according to the report.

There was yet another bank closure that went widely unreported this past Friday.

Pioneer Community Bank, Inc. in McDowell County, West Virginia, acquired the local deposits of Ameribank's five branch banks in that state after the federal Office of Thrift Supervision closed Ameribank Friday night and appointed the Federal Deposit Insurance Corporation to serve as receiver of the failed bank. Although customers had questions, Monday proved to be a relatively normal business day, FDIC spokesman David Barr said.

"So far it's been going very smoothly," Barr, who was stationed at the former Ameribank branch in Northfork, said. "There has been regular traffic. It seems like regular Monday morning traffic. I do know of one individual who closed an account."

Presently, Intrade.com has mostly heavy trading volume on 25 to 29 bank failures by year's end.  Bank United Financial was getting the highest volume from those betting on the next bank closure. 

----

Jagajeet Chiba, Gambling911.com

Business/Financial News

Macau Sees Further Declines, Still Carries Risk

Deutsche Bank analysts released a research note today, commenting on the major Macau gaming stocks and assessing the risk factors for each.

How Can I Build My Own SportsBook and Virtual & Live Dealer Casino Gambling Site?

Internet sports betting and online gambling as a whole is big business these days and it has never been easier to get a piece of the action as your own independent sports bookmaker and online casino operator.

Five Ways to Save Money With Your Pay Per Head Platform

Here are 5 ways you can save money using a pay per head platform and save even more money with PayPerHead.com’s new promo!

Online PPH Solution Recommendation: No Beating Around the Bush

Bookmakers today are looking for a complete turnkey solution for their online service needs, and the process of selecting the right service can be challenging and time consuming.

Find the Best Cloud Based, Turnkey Sportsbook Software For Real Bookies

If you are an independent sports bookmaker operating in today’s highly technical online environment, you need a price per head service that can keep you way ahead of the curve when it comes to sports betting innovation.

Syndicate