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

Douglas County KS Bookies, Pay Per Heads: Feature City Lawrence

Douglas County KS Bookies, Pay Per Heads: Feature City Lawrence

The Douglas County, Kansas bookies are in high demand as the town of Lawrence is home to the University of Kansas’ main campus and the red hot College Basketball team, the Jayhawks.

3 Attributes Every Pay Per Head Agent Should Have

3 Attributes Every Pay Per Head Agent Should Have

To be a successful online bookie agent, a person should have 3 attributes. Determination, integrity, and emotional intelligence, find out why here.

Is It Worth Paying for Premium Bookie Software?

Is It Worth Paying for Premium Bookie Software?

Discover why a premium bookie software is important. See what tools they offer to provide online bookies with a successful and lucrative business.

How Pay Per Head Reporting Can Improve Your Business

How Pay Per Head Reporting Can Improve Your Business

Online bookies can't have a successful sportsbook without the right reports. See where players are betting, and learn to leverage it and make more money.

Playboy Playmate Sara Underwood Tells Local Bookies How to Make More Money

Playboy Playmate Sara Underwood Tells Local Bookies How to Make More Money

What Does Playboy Playmate Sara Jean Underwood Have to Say About the Pay Per Head Sportsbook Business?

Syndicate