"Your Highness, after Washington Mutual was taken over by the Federal Deposit Insurance Corporation on the 24th, JPMorgan Chase is actively negotiating with them to acquire a majority of Washington Mutual's assets..."
Zhang Junning said softly to Barron,
"To complete this acquisition, JPMorgan Chase hopes to secure at least $5 billion in financing. They have proactively conveyed this intention to the BFT Fund. Mr. Duane Hurst called half an hour ago to ask for your opinion." "
Okay, I'll call him back immediately."
"Then I'll be out first, Your Highness."
If before becoming Barron's personal assistant, Zhang Junning knew her boss as a British aristocrat of astonishing wealth, then now, as Zhang Junning's close proximity and exposure to more and more information about him grew, her awe of him grew stronger. After all
, Morgan Stanley, Merrill Lynch, and JPMorgan Chase—before Zhang Junning knew what these names meant, they were established companies at the top of the food chain in the global financial system.
Now, with Baron's simple words, they were either acquired or had their shares taken over...
The most visceral and thrilling part of this feeling wasn't just the transactions often involving billions or even tens of billions of dollars, but also the experience of being up close and personal with events that would go down in history.
The reason Zhang Junning had to relay the call from BFT Fund CEO Duane Hurst to Baron was because they were currently on a plane bound for China.
With the Beijing Olympics approaching in August, Baron departed from New York for China.
It's worth noting that he traveled to China after reuniting with Fan Bingbing—who had arrived in America two weeks earlier to reshoot scenes for the second season of "Succession" and attend related events.
Because they were on a plane, and Baron had been resting in his bedroom, all calls were answered first by his assistant, Zhang Junning, to avoid being disturbed.
"It's me, Duane. Something about JPMorgan Chase..."
Baron quickly dialed Duane Hurst.
After acquiring the branches and assets of Merrill Lynch and IndyMac, Standard Chartered Bank did not re-enter the competition for Washington Mutual's assets.
After all, integrating Merrill Lynch and IndyMac into Standard Chartered's system was already a challenge. Besides
the overlap between the various banking institutions, the Merrill Lynch acquisition had not yet received final approval from US regulators, so Standard Chartered did not need to create further complications now.
Washington Mutual, headquartered in Seattle, is the largest savings bank in the United States, with $307 billion in assets and $188 billion in deposits.
Its assets far exceed those of Continental Illinois National Bank, which closed in 1984, and IndyMac, which was taken over by the government earlier this year. Therefore, Washington Mutual's collapse is the largest bank failure in the United States to date.
After Washington Mutual was taken over by the Federal Deposit Insurance Corporation, JPMorgan Chase attempted to acquire the bank's 5,400 branches across 23 states.
You should know that in March of this year, JPMorgan Chase just acquired Bear Stearns, the fifth largest investment bank on Wall Street. For that acquisition, JPMorgan Chase received nearly US$30 billion in financial support from the Federal Reserve. Now, JPMorgan Chase faces another funding crunch as it looks to acquire Washington Mutual's branches and deposit business.
This time, the Federal Reserve will not lend JPMorgan Chase money to acquire Washington Mutual's assets, which have already been taken over by the Federal Deposit Insurance Corporation.
JPMorgan Chase will need to raise the necessary funds on its own.
According to estimates, JPMorgan Chase would need to pay between $2 billion and $3 billion to acquire Washington Mutual's branches and deposit business. Considering that Washington Mutual's assets and deposits are nearly ten times larger than IndyMac's, this price represents a significant bargain compared to the $1.5 billion Standard Chartered paid for IndyMac's branches and deposits.
However, due to Washington Mutual's aggressive development of subprime and other risky mortgage lending, its rapid expansion has also accumulated risks that are ten to twenty times greater than IndyMac's.
Furthermore, unlike the IndyMac Bank disposal, the FDIC will not use its deposit insurance fund for Washington Mutual this time. Public data shows that following the collapse of IndyMac Bank earlier this year, the FDIC's deposit insurance fund plummeted from $52.4 billion at the end of the previous year to $45.2 billion, drawing widespread criticism from federal regulators.
Therefore, JPMorgan Chase's ability to acquire the branches and deposit business of Washington Mutual, formerly the largest savings bank in the United States, at a lower price comes at the cost of significant capital investment to deal with some of the nonperforming assets left behind by Washington Mutual, which had previously invested deposits in subprime mortgages.
This is why JPMorgan Chase needs to raise funds to complete the acquisition.
Of course, even this move would likely benefit JPMorgan Chase more than the risks. Duane Hurst told Barron's that the acquisition, once completed, would add 50 cents per share to JPMorgan Chase's 2009 earnings.
Therefore, investing in JPMorgan Chase at this opportunity is essential, though the specific investment plan remains to be determined through further negotiations between the two parties.
...
The Devonshire landed at Yanjing Airport. Barron would be residing in the four-story "Grand Duke's Mansion."
He and Fan Bingbing's two children had been sent to Yanjing when Fan Bingbing left for America, to be cared for by her parents and a nanny. They
had already sent the children here when they arrived—after not seeing them for a while, Fan Bingbing missed them deeply.
Fan Bingbing is a year younger than Barron, not yet having celebrated her 27th birthday. She now appears to have acquired a slightly more mature charm than when Barron first met her.
Among his many women, Fan Bingbing holds a special place for Barron—and not just for her stunning beauty.
While Barron has many stunning women around him, including Bonnie and Aaliyah, her beauty, in the Chinese style, carries with it a spiritual element from past lives.
Now, with their children, this feeling has taken on a deeper meaning.
Before they moved in, the courtyard had already been cleaned.
While Baron was playing with Fan Bingbing and the children, Alia was directing the maids who had come with Baron to decorate the courtyard, making it the most comfortable for Baron. After all, he had rarely stayed here before. The few times he had come to Yandu, he had always stayed at the "Little Duke's Mansion" near the Forbidden City.