Chase buys WaMu while Congress continues to debate bailout

J.P. Morgan Chase has agreed to buy the bulk of the failing Washington Mutual’s operations. Chase is paying $1.9 billion to the government for WaMu’s banking operations and will assume the loan portfolio of the thrift, which has $307 billion in assets. Chase raised $10 billion in a stock sale today after buying most of WaMu. Chase sold 246.9 million shares at $40.50 per share, 6.8 percent lower than yesterday’s closing price of $43.46. Congressional leaders broke off talks last night about the $700 billion bailout, and no agreement was reached. Included in the discussion of the bailout was a breakdown of the $700 billion, including $250 billion immediately available to buy bad assets, $100 billion on the Treasury secretary’s request and $350 billion subject to congressional joint resolution. Also addressed was equity sharing in each transaction, and the creation of a board with “cease and desist” power to audit funds and monitor Treasury authority. Meanwhile, General Electric is showing signs of softening during the financial crisis, and sharply reduced its profit projections for the current quarter and the year. G.E. pinned the blame for the shortfall on its finance arm, GE Capital, whose global portfolio spans aircraft leasing, commercial real estate lending, credit cards and home mortgages. TRD