Sheila Bair's Biggest Haters

Back during the last administration it was always obvious that FDIC chair Sheila Bair was never really on the same page as Hank Paulson and Ben Bernanke. They tried to paper up their differences, but it didn’t work.

That being said, Sheila Bair has enemies all across the land. Judging by the response to our post about bailout corruption, there’s an angry faction of former WaMu shareholders who are convinced that she, along with Jamie Dimon conspired to kill the bank, wipe out the equity and gift it to JP Morgan (JPM). They have petitions, letters and lawsuits against her.

John Hempton, who’s far from crazy or paranoid (but who did lose money on WaMu) penned a long argument last September calling the move reckless and irresponsible.

Following our recent post we received this letter from a disgruntled shareholder, calling on her to be indicted.


We, decent American middle class taxpayers and Washington Mutual shareholders, are writing to you regarding the Office of Thrift Supervision (OTS) and FDIC’s confiscation of WaMu and aiding JP Morgan to wipe out WaMu’s shareholders in September 2008. We respectfully request Congress investigate FDIC/JP Morgan’s conspiracy and order JP Morgan to compensate WaMu shareholders.  
 Founded in 1889, WaMu was the largest savings bank in the U.S. until the OTS/FDIC intentionally killed it in September 2008.  According to Wall Street Journal, on or about 09/04/2008, three weeks before the seizure of WaMu, the FDIC had already informed JP Morgan of the planned seizure. On 09/08/2008 the new CEO of WaMu signed a memorandum of understanding with the OTS, agreeing to provide a multiyear business plan to the regulator, including a forecast for earnings, asset quality and capital. The media said the plan did not require WaMu to raise capital, boost liquidity or cut products and services, indicating WaMu had enough capital and liquidity to operate as a well-capitalised institution. 
            On Sep 9, 2008 Standard & Poor’s (S&P) downgraded WaMu to negative from stable, signaling that a rating downgrade to junk status is more likely over the next two years. Two days later, Moody’s also downgraded WaMu. WaMu responded immediately with a statement that Moody’s downgrade was inaccurate and biased. WaMu had enough capital and liquidity, significantly above the requirements for a well- capitalised bank. Having been scrutinized by regulators everyday inside the bank, WaMu dared not and did not lie.  
            However, the OTS/FDIC didn’t want to wait for two years. They played all kinds of games in order to kill WaMu and give it to JP Morgan as soon as possible. Even though WaMu’s capital level was significantly above well-capitalised, several days later, WaMu was downgraded again by S&P, Moody’s and the OTS to “junk” status. Obviously, people believe it was the OTS/FDIC that directed, arranged or instructed these downgrades in order to collapse WaMu.  
 On one hand the OTS advised WaMu’s new CEO to look for buyers without a deadline, indicating that WaMu was well capitalised by then. WaMu was then discussing terms with 6 potential suitors including J.P. Morgan through investment bank Goldman Sachs. On the other hand, the FDIC went behind WaMu to forge a dirty deal with JP Morgan, knowing that JP Morgan was negotiating with WaMu in the front. Unbeknownst to WaMu, the FDIC had talks with all the potential buyers, exaggerated WaMu’s problems and threatened that the FDIC was going to seize WaMu soon, so that nobody would dare to make an offer.  
 It was these downgrades orchestrated by the OTS/FDIC and illegal secret talks between the FDIC and the 6 potential buyers behind WaMu that induced what the FDIC claimed a “bank run” in deposits between Sept. 15 and 24, 2008. Important to note, the FDIC’s secret deal with JP Morgan started before this period. The FDIC then had an excuse to claim that WaMu did not have enough capital and liquidity and should be seized immediately (even though WaMu did have enough capital and liquidity, with $5 billions in cash on deposit and 90% of WaMu’s deposits still left intact during the period). The FDIC then seized WaMu and gave it to JP Morgan for next-to-nothing. A decent, well-funded (and the country’s largest) U.S. savings bank that had served the American people for over 100 years was suddenly killed by the FDIC and JP Morgan’s premeditated conspiracy. 
 All communications between Moody’s, S&P, and the OTS/FDIC should be investigated by Congress. The 6 insider firms that the FDIC secretly dealt with should come to light and answer questions. Their transactions on WaMu must also come to light. 
 The FDIC had already leaked a planned seizure of WaMu to JP Morgan 3 weeks before WaMu’s seizure. The possible inappropriate relationship between the FDIC chairwoman Sheila Bair and JP Morgan CEO Jamie Dimon should also be investigated. An article from WSJ is enclosed to validate this claim. 
            JP Morgan had long wanted to buy WaMu, but their low offer had been rejected by WaMu earlier. This time, for a mere 1.9 billion dollars, JP Morgan got WaMu’s $310 billion in assets, plus 2239 WaMu branches nationwide, including those in California, where JP Morgan did not have a foothold, but had long dreamed to have one. JP Morgan kept WaMu’s huge assets and very profitable branches, but dumped the trouble loans to the government and the American taxpayers. This transaction is like getting a $310K house, for only $1.9K and then asking government and taxpayers to fix the house for the new owner.     
 The FDIC now becomes a corruptive profit institution. They took over WaMu, sold off and pocketed the money while it was still healthy, like putting and burying a healthy person into a coffin while he is still able to jog and run. JP Morgan got the assets and deposits at a bargain while shareholders of WaMu get nothing. It is literally something that would happen in Nazi Germany, not in the United States. What the FDIC did to WaMu was exactly the same as what the Japanese did to the Americans during World War II. On Saturday, Japanese Foreign Minister signed the peace treaty with the USA in Washington D.C. Next morning, Japanese bombed Pearl Harbor and seized all the assets of American banks in Hong Kong. President Franklin Roosevelt was totally in the dark. Like FDIC seizing WaMu and giving it to JP Morgan, only planners Sheila Bair and Jamie Dimon knew when to pull the trigger, because it was totally a conspiracy.   
            It is believed that the misconduct of the OTS/FDIC helped JP Morgan steal WaMu from investors. JP Morgan had been making phantom negotiation with WaMu in the front, while getting inside information from Ms. Bair behind the curtain. It is theft and a criminal act on the part of JP Morgan to exploit the director of OTS and chairwoman of the FDIC and benefiting to take WaMu’s $310 billion dollars in assets plus 2239 very profitable branches at an exorbitant discount. WaMu is not the first victim JP Morgan has claimed. Inside information, Senator Chuck Grassley recently disclosed, was used by JP Morgan to aid in the collapse of Bear Stearns. Lehman Brothers has also accused JP Morgan of freezing its assets precipitating in their bankruptcy. Not only did WaMu shareholders lose all their savings due to the FDIC’s unlawful act of snatching the share value by conspiracy, but by also being taxpayers, they now have to pay for the loans that JP Morgan will dump, a perfect example of double shafting.  
   Because of their less stringent policy, WaMu was ripped off by mortgage agents who cheated WaMu in order to get the biggest commission. Like Citigroup and Bank of America, WaMu had lost huge and become one of the biggest victims. Congress passed and the president signed the rescue and stimulus plan. However, the real victim, decent, hard working WaMu, who was supposed to be rescued, was unfortunately untimely killed by the FDIC and JP Morgan’s collusion. Now the biggest corruptor – JP Morgan’s CEO Jamie Dimon benefits on WaMu’s behalf from the rescue stimulus plan. Dimon, who has a salary of 15.5 millions plus option 40 millions per year, will get double and triple this year because he can proudly take credit for corrupting huge WaMu assets for free through a collusion with Bair. 
 Unfortunately, the person to blame for this debacle is still in charge and threatening future American prosperity. Forbes stated that the FDIC’s Sheila Bair is the second most powerful woman in the world next to the German Chancellor. She can make any big bank disappear and wipe out its shareholders at any time she wants. Above the law and the Congress Bair dares against the American spirit to plunder the property from hard working middle class families. It was Bair who destroyed the American people’s confidence in the stock market by this unlawful

seizure of well-funded WaMu and wiping out all shareholders. Bair did the same to another big bank, Wachovia, after she threatened Wachovia with either being seized by the FDIC or accepting Citigroup’s $2.1 billion arbitrarily set by Bair, Wachovia chose the latter, the less lethal option.  
 When AIG collapsed and Lehman Brothers bankrupted, the stock market was still stable. It wasn’t until WaMu was unlawfully seized by the FDIC that the stock market collapsed, because it was totally against the American spirit. The American people were totally astonished and panicked. Who would be the next victim? They worried that their lifetime savings and retirement investment could be plundered by Bair without any justification and given away for free. It was Bair’s illegal abuse of power by plundering WaMu from the shareholders while it was still healthy that scared American people and caused the cascade of American stock market meltdown and worldwide financial crisis. If the Congress didn’t pass the bill to increase the FDIC insured amount from $100k to $250k, Sheila Bair’s wrongdoing would have caused even worse damage.  
 It is an insult to American civilisation, our senators and congressmen for Bair to extremely abuse her power and help Dimon of JP Morgan to corrupt. JP Morgan now benefits hugely from WaMu’s huge assets and thousands of very profitable branches at the expense of WaMu shareholders. Investors all know that JP Morgan’s value increased greatly by getting WaMu for free. JP Morgan’s stock significantly outperformed their peers in this financial crisis. JP Morgan now is the biggest bank in the U.S., at the expense of WaMu shareholders. Article from media clearly point out that JP Morgan is Responsible For The Destruction Of The US Financial System.  
 Even though CitiBank and Bank of America have problems similar to that of Washington Mutual months ago, Ms. Bair dares not to play the same kind of game to kill them because they are too big for JP Morgan to swallow. We don’t mean Citi and Bank of America shareholders should suffer the same as WaMu shareholders, but it clearly shows that when JP Morgan wanted WaMu, Bair was anxious to help JP Morgan in exchange for future benefits. 
 All Americans have now become victims of this grand theft orchestrated by a politically influential and cunning businessman, JP Morgan’s Mr. Dimon, with the government’s help. If this corruption orchestrated by the FDIC can be tolerated in our great nation and with the blessing of Congress, do we have any moral right to criticise any other countries human rights record? FDIC Bair’s unlawful seizure of WaMu has shown that the U.S. like Nazi, Germany, has the worst human rights record in the whole world.            

The American people believe that the OTS/FDIC acted in a premeditated fashion to kill WaMu from the very beginning, no matter how hard WaMu was working in order to stay alive. All the games that the FDIC played were designed to benefit JP Morgan. American people have a lot of questions and doubts regarding this untimely killing of WaMu, and they deserve answers.

 *How could the FDIC inform JP Morgan the planned seizure while WaMu was still a well capitalised bank?

      *How could JP Morgan pretend to negotiate with WaMu in the front while they had inside information behind the curtain from the OTS/FDIC? 
            * How could JP Morgan present hundreds of pages of acceptance of purchase of WaMu to FDIC within a few hours, if this wasn’t a premeditated game?  
            *How does JP Morgan bribe top officials of the OTS/FDIC in exchange for their help to get WaMu dirt cheap and become the biggest bank in the nation and biggest winner in this worldwide financial disaster? What position/compensation/benefit did Dimon promise them once they are out of government office? and/or what did Dimon offer their family members, that prompt them so anxious to kill WaMu to give it to Dimon? 
 *How did the OTS/FDIC orchestrate downgrades by Moody’s, and S&P?  
 *While WaMu was advised by the OTS to actively discuss with potential buyers, was it justified for the OTS/FDIC to secretly talk with the same buyers behind WaMu’s back, exaggerating WaMu’s problems, and threatening them away so that JP Morgan could have WaMu for free?  
 *Why did the OTS/FDIC initiate this seizure immediately after media reports of a possible bailout deal? What made Bair decide that WaMu’s $310 billion asset and 2,239 profitable branches is only worth of $1.9 billion without open competition? How could she pocket that $1.9 billion and wipe out WaMu shareholders?  
 *What was Bair based on when she gave Wachovia to Citigroup for 2.1 billion a few days later? Wells Fargo later offered Wachovia $15 billion or $6 per share, in an open, fair, traditional and healthy way. Wachovia accepted their offer and both banks have been proven a very healthy combination since. However, because of Bair’s wrongdoing, WaMu shareholders received nothing for a similarly valued property.  
 A hundred years from now, people will still remember that in the year 2008, the biggest U.S. Savings bank WaMu was killed, plundered, WaMu-ed by conspiracy and corruption of the FDIC and JP Morgan. WaMu shareholders and American taxpayers demand that the FDIC be investigated for abusing their power and WaMu shareholders should be compensated.  
 Department of Justice has launched an investigation into the collapse of WaMu. It is widely believed by American people that the failure of WaMu was precipitated by the OTS/FDIC, who breached the law to help JP Morgan to steal WaMu. It was Bair who destroyed American people’s trust in government. The FDIC should be investigated even more than WaMu for their illegal abuse of their powers which caused the nations largest thrift bank to disappear over night. In order to maintain fairness and impartiality, the FDIC, the one who committed the crime should not be in the investigation team to avoid a possible obstruction of justice. Like WaMu, FDIC is an entity to be investigated rather than a member in Task Force. Ms. Bair should be indicted and investigated for her misconduct. Compensation should be paid out to WaMu’s shareholders to respect human rights of the shareholders and restore American people’s confidence destroyed by Ms. Bair.  
 After losing our lifetime savings and retirement investments, we respectfully request that the Congress start an investigation into the possibility of wrongdoing, misconduct, conspiracy, and corruption of OTS/FDIC, who unlawfully helped JP Morgan steal WaMu from its shareholders by the Nazi, Germany-like seizure of WaMu. Like Wachovia who received fair compensation from Wells Fargo, WaMu shareholders should be compensated for their righteous property plundered by FDIC/JP Morgan’s conspiracy. 

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