Commentary - 04/14/2008

WaMu and Wachovia Re-Inflated (For Now)

So, Washington Mutual and Wachovia have now been re-inflated, like balloons, according to these recent articles:
Deflate: WaMu faces $14 billion losses, should be shorted: GS - Reuters
Inflate: WaMu's $7 billion rescue plan nearly doubles its shares - Salt Lake Tribune

Deflate: 'Moment of truth'for Wachovia - TradingMarkets
Inflate: Wachovia to get capital infusion: WSJ - Reuters

It really makes one wonder just who is providing the "air." There was a letter[pdf] from the Federal Reserve to Barclays, back in October 11, 2007, that granted Barclays direct "air" should they need it. This was covered by the Financial Times in the October 21, 2007 story titled: Barclays and RBS set up Fed back-up.
The Fed has given Barclays and RBS [Royal Bank of Scotland] permission to borrow up to $20bn and $10bn respectively.
. . .
People close to the banks said neither had any current intention of using the facilities.

Barclays said: “This secures another potential source of funding should our U.S. clients seek it.”
Well, maybe they're using it now. It simply amazes me that such a small group of 10 can control over 50% of each of these two companies, when there are hundreds of other institutional shareholders. Now that's power.

There also seems to be a shifting of share ownership that took place in the last half of 2007. After reviewing the significant changes in Major Holders, especially with Capital Group loading the boats with these banking stocks. Again, at the same time, it looks like Barclays and Associates have been unloading their boats. At any rate, they certainly share the common interest of seeing these two banks stay afloat, therefore the "balloon" gets re-inflated.

The most significant change has been Capital Group's sharp rise in ownership in the last six months, and interesting reductions in Barclays/Associates.

Washington Mutual29.93%18.46%16.26%23.18%

In my opinion, there's too much secrecy in both large corporate businesses and government, which both affect millions of people. It just makes it too easy for those few to lie, steal and murder.
Perhaps that's why: Sometimes The Dragon Wins

Symbol Name Of Corporation

Washington Mutual Inc. (As of 31-Dec-2007) (As of 30-Jun-2007)
Top 10 Institutional HoldersShares2007Value2006
Capital World Investors69,730,0008.03%$949,025,300-.--%
Capital Research Global Investors58,868,5506.78%$801,200,965-.--%
Brandes Investment Partners L.P.50,201,6785.78%$683,244,837-.--%
Barrow, Hanley Mewhinney & Strauss, Inc. (Old Mutual)45,047,3195.19%$613,094,011-.--%
Hotchkis & Wiley Capital Management, LLC43,488,0925.01%$591,872,932-.--%
Harris Financial Corp35,158,8124.05%$478,511,431-.--%
Franklin Resources, Inc29,357,4213.38%$399,554,499-.--%
Barclays Global Investors UK Holdings Ltd29,247,7623.37%$398,062,040-.--%
Dreman Value Management, L.L.C.27,962,7973.22%$380,573,667-.--%
State Street Corporation27,442,0593.16%$373,486,422-.--%
% of Shares Held by All Insider and 5% Owners:0%-.--%
Top 10 [1.7%] of 574 Institutional Holders Control47.97%-.--%
Percentage of Barclays and "Associates" Control13.96%-.--%
NOTE: Capital Group manages five funds that control 15.12%.
Franklin manages a fund that controls 2.30%.
Therefore, the TOP 10 Major Holders control 65.09%,
Barclays/Associates control 16.26%, and
Capital Group controls 29.93% of Washington Mutual.

Symbol Name Of Corporation

Wachovia Corp. (As of 31-Dec-2007) (As of 30-Jun-2007)
Top 10 Institutional HoldersShares2007Value2006
Dodge & Cox Inc96,029,0815.05%$3,651,985,950-.--%
Capital Research And Management Company70,526,3273.71%$3,536,895,299-.--%
State Street Corporation67,987,4463.58%$2,585,562,571-.--%
Barclays Global Investors UK Holdings Ltd64,214,9173.38%$2,442,093,293-.--%
Vanguard Group, Inc. (The)58,391,6843.07%$2,220,635,742-.--%
Capital Research Global Investors55,698,3282.93%$2,118,207,413-.--%
FMR LLC (Fidelity)51,429,1352.71%$1,955,850,004-.--%
Davis Selected Advisers, LP35,562,3301.87%$1,352,435,409-.--%
Capital World Investors30,498,0001.60%$1,159,838,940-.--%
Morgan Stanley27,709,0081.46%$1,053,773,574-.--%
% of Shares Held by All Insider and 5% Owners:2%-.--%
Top 10 [1.0%] of 990 Institutional Holders Control29.36%-.--%
Percentage of Barclays and "Associates" Control8.42%-.--%
NOTE: Capital Group manages three funds that control 4.26%.
Dodge & Cox manages two funds that control 3.68%.
Vanguard manages two funds that control 1.58%.
FMR (Fidelity) manages a fund that control 1.04%.
Washington Mutual manages a fund that controls 1.01%.
Therefore, the TOP 10 Major Holders control 50.36%, and
Barclays/Associates control 9.43% of Wachovia Corp.
Capital Group now controls 12.50%.

© 2008 by Edward Ulysses Cate
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