WAMU Fails. Taken Over by JP Morgan. Taxpayers get 1.9 billion???

[lelgt60]

Am I missing something here?

Isn't this the way it's supposed to work?

To everyone's surprise, JP Morgan bought both the deposits AND the assets (read: mortgages) of Washington Mutual.

From the New York Times, Sept. 26 http://www.nytimes.com/2008/09/27/business/27wamu.html?ref=business :

"JPMorgan paid $1.9 billion to the F.D.I.C. to acquire all of WaMu’s assets, branches and deposits. But the bank will most likely be responsible for absorbing $31 billion in losses tied to WaMu’s troubled loans. WaMu shareholders and certain bondholders were wiped out, avoiding another expensive taxpayer-financed bailout."

WaMu was the nations biggest Savings and Loan. Why do we need this bailout, again??