It was announced today, after-hours, that the FDIC is taking control of Washington Mutual (WM) and selling its deposits as well a number of branches to JP Morgan for $1.9 billion.

JP Morgan has proven itself to be human this week by forewarning of further write-downs in the present quarter related to credit market turmoil. The iconic bank had avoided much of this carnage up until recently. This is causing some to question the thesis that a bottom in financials was reached in July.

JP Morgan is releasing earnings before the open of market tomorrow. Here is an option play that can realize big gains if the company releases good news, but break evens on bad news and if the stock really tanks then we make money either way.

The Bear Stearns assets being financed were valued at about $30 billion in March. The Fed now says the assets, which were re-evaluated by the Fed and Blackrock Inc., are now valued at about $28.9 billion.

A majority of Bear Stearns shareholders approved a buyout of the company for about $10 per share by J.P. Morgan Chase & Co. at a brief meeting of shareholders at the Bear Stearns Headquarters in midtown Manhattan.

JPMorgan Chase & Co. plans to keep the co-heads of fixed income at Bear Stearns Cos., the first senior posts given to executives from the failed New York securities firm since its rescue three weeks ago.

It was another good day in the market. The Dow rose 187.32, or 1.52%, to 12,548.64, after rising more than 260 points on Thursday, the last day of trading before the Easter weekend.

Broader stock indicators also advanced. The Standard & Poor's 500 index rose 20.37, or 1.53%, to 1,349.88, and the Nasdaq composite index rose 68.64, or 3.04%, to 2,326.75.

A poll on the reason why Bear Stearns is trading way above the offer price of $2.00 per share (or $2.34 offer based on the closing price of JP Morgan on 3/18/08). Please vote, and if you have any other theories make a comment.

Senior Executives of Bear Stearns with stakes of over $100 million even at the reduced pre-sale market price of Bear shares, saw their life savings go up in smoke. And so did outside investors such as Bahamas based Joseph Lewis, who bought into Bear Stearns shares worth $1 billion last year.