JPMorgan Chase & Co. CEO Jamie Dimon laid out what may be the primary motivation for the Bush administration's proposed $700 billion bad-home-loan bank bailout: "If they do it right, they will lift the value of the assets and make them worth more. That will help the housing market and the mortgage market."
Dimon also said JPMorgan, which avoided the worst of the subprime mess by selling risky loans before the market blew up, doesn't need the bailout to make his Washington Mutual Corp. deal pay.
"We’re safer with what the government’s doing, but we’re not relying on what the government’s doing," he told investors in a conference call this morning. JPM is buying WaMu for $1.9 billion, plus huge, not-yet-determined potential loan losses that Dimon said the bank can manage even without the government rescue: "We would have done it anyway."
Dimon also said JPMorgan outbid other banks to buy WaMu assets from the Federal Deposit Insurance Corp., which seized the bank to prevent it from failing.
How much more did JPM agree to pay vs. its rivals? Said Dimon, "We don’t know, and we don’t care."