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Thursday, September 25, 2008

I, For One, Welcome Our New JP Morgan Chase Overlords

Another day, another collapse of a major financial institution. This time it was Washington Mutual, which was bought by JP Morgan Chase. The same company that bought Bear Stearns. Thus continues a period of consolidation in which a few companies have survived the mortgage meltdown and become bigger and stronger in the process. Oh, and with fewer rivals too. That's all good, right?:
The transaction gives JPMorgan roughly 5,400 branches, and fulfills JPMorgan Chief Executive Jamie Dimon's long-held goal of becoming a retail bank force in the western United States.

It comes four months after JPMorgan acquired the failing investment bank Bear Stearns Cos at a fire-sale price.

"Jamie Dimon is clearly feeling that he has an opportunity to grab market share, and get it at fire-sale prices," said Matt McCormick, a portfolio manager at Bahl & Gaynor Investment Counsel in Cincinnati. "He's becoming an acquisition machine."
Thursday's transaction makes JPMorgan close in size to Citigroup, now the largest U.S. bank by assets.

JPMorgan has surpassed Bank of America in size. That bank would become the largest U.S. bank once it completes its planned purchase of Merrill Lynch, expected in the first quarter of 2009.

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