Things are not so good at the Banks

[Andyc545]

Thanks for updating me on Wachovia's hiring practices. The 6 month rule might be compliance-related, to prevent co-employment claims. Do you know if they get benefits? I'm thinking maybe not, given the short contract.

[Commoner]

I think I read a rule against link-only and article reposting when I signed on.

In any event, here's the latest from the WSJ concerning BOA IB restructuring:

http://online.wsj.com/article/SB1193260838...l?mod=djemalert

The most relevant part (as far as most here are concerned), from Valerie Bauerline (Wall Street Journal):

"...In an interview, Moynihan said the shakeup isn't a wholesale retreat from investment banking but an effort to acknowledge weaknesses and begin rebuilding for the future. "We're in this business," Moynihan said. "We're in for our customers, we're in to help them achieve their objectives."

The review of the investment banking unit will closely scrutinize how active Bank of America will remain in securitized loans and other more exotic structured instruments. But Moynihan said the bank will continues to be active in treasury management, commercial lending, debt issuance and other key services for big commercial customers."

[monsoon]

Channel 9 just reported that BofA has announced 3000 job cuts.

[HopHead]

Channel 9 just reported that BofA has announced 3000 job cuts.

[monsoon]

Per the Observer, Bob Stickler said that no city would lose more than 150 jobs. He also added that Charlotte was NOT the hardest hit. So it sounds like it will be distributed all over the BofA locations.

[Raintree21]

They don't say how many, but it is mentioned that some of the jobs had been planned to be cut for sometime, they just happened to occur at the same time. I know that jobs are jobs and it's all bad, but are the ALL related to the same cause and a market downturn?

[Commoner]

Per the Observer, Bob Stickler said that no city would lose more than 150 jobs. He also added that Charlotte was NOT the hardest hit. So it sounds like it will be distributed all over the BofA locations.

[deacgirl]

Interesting. I DRTA but I'm shocked that BOAS has a presence in enough markets to allow them to cut 150/city and reach 3k. I would have thought 1500 would come from NYC.

[monsoon]

The source is the Charlotte Observer. I don't think I would put too much stock in that city limitation as the local media is usually very negligent in getting such details correct.

[Commoner]

I was under the impression that the "no city is losing more than 150 jobs" pertained only to the 700 jobs in the wholesale mortgage division. These cuts are spread across 4 processing centers and support jobs, so the no more than 150 would make sense. I can't imagine how they could spread all 3,000 out that thin.

[monsoon]

....

On the second point, Wachovia does a lot of hiring of people these days on 6 month contracts. These are employees of the bank but only have a guarantee of work for 6 months. So when the contract ends they are not counted as being layed off. A lot of their technology people come in this way.

[cltheel.sdl]

^ I'm sure they probably do, as A2's absence is very noticeable.

[hueion39]

^ I'm sure they probably do, as A2's absence is very noticeable.

[dxartist]

It is still blocked, but A2 got a promotion at another company. The two of us were probably the cause of the block.

[monsoon]

The consumerist has organized a vote for the worst company in America. This week Wachovia Corporation is pitted against Ticketmaster.

More at this article.

[Nostyle]

^Ticketmaster is blowing Wachovia away...and I guess that's a good thing.

[DjStedali]

Yea I'd have to go with Ticketmaster just for the fact of the Winter Classic here in Buffalo it was near impossible to get tickets from their site since you would get people buying up batches of 20 tickets for the low price to sell online for 10x as much.

[monsoon]

Current voting of all the companies BofA is already up there. It should be noted that BofA says that it wants to purchase countrywide.

------------------------

Early leaders in Worst Company in America 2008 preliminary voting round: Comcast 21%, Best Buy 8%, Bank of America 5%, Fox News 5%, Walmart 5%, Countrywide 4%, Verizon 3%, AT&T 3%. Somewhere in our heart is a flicker of hope that dark horse Video Professor will pull into the running (currently with 0% of the vote). Voting for who gets to be seeded in the tournament brackets is still open, cast yours today.

[1979Heel]

Today's Observer has a front-page article about the state of the banking industry. As you read through it, it quotes bank analysts as seeing Wachovia either as a survivor or as take-over bait. Given that their stock has cratered (-55%) in the last 12 months, I'm guessing they won't survive. JPMorgan Chase, Wells Fargo and even US Bank in Minneapolis all have greater market cap.

It's too bad. But as Sen. Charles Schumer, D-NY said on CNBC this morning (re: Bear Stearns), "live by the capitalist sword, die by the capitalist sword." Just hope the tower and museums get finished before they get snapped up.

[monsoon]

If they get taken over and the HQ moved elsewhere, it will have quite an effect on CLT. The failure and subsequent buyout of B&S last week as a dramatic example of this. I believe a year ago their stock was selling for has high as $141, and this weekend they got bought out for $2/share. Yesterday they announced they are laying off 50% of their people.

Imagine that in Charlotte.

[krazeeboi]

OK, I'm not an economist by any means, but I do know that things just aren't looking good for the economy right now, and especially the banking industry. Now, of course, Charlotte has more industries besides banking, but let's be real--banking is the town's bread and butter. Out of all of the headquarters that exist in the area, if anything happens to the banks, it would send shock waves through the local economy. Now we don't want to think about it, but given the current state of things, what's the worst thing that could happen here in Charlotte as far as the banking industry goes? How would that affect our growth (in terms of population and economy)? Might we see projects currently under construction abandoned? Could plans for the next light rail lines get shelved indefinitely? Just wanting to get others' thoughts here.

[Charlotte_native]

OK, I'm not an economist by any means, but I do know that things just aren't looking good for the economy right now, and especially the banking industry. Now, of course, Charlotte has more industries besides banking, but let's be real--banking is the town's bread and butter. Out of all of the headquarters that exist in the area, if anything happens to the banks, it would send shock waves through the local economy. Now we don't want to think about it, but given the current state of things, what's the worst thing that could happen here in Charlotte as far as the banking industry goes? How would that affect our growth (in terms of population and economy)? Might we see projects currently under construction abandoned? Could plans for the next light rail lines get shelved indefinitely? Just wanting to get others' thoughts here.

[Commoner]

If one of the banks here folded or was bought and taken from the area the ripple effect would be huge. Not only from the real economic impact, but from the reaction of those that live here, those that invest here (from inside the city and outside), as well as the national perception right now that this is a quickly emerging city where times are good and it is a good place to live and settle down. Right now we have the dual benefit of being seen as growing with lots of job potential and housing that is priced low compared to similar metro areas.

Take one of our prominent corporate citizens out of the picture, thing change quite a bit.

Most people I know that have moved here in recent years actually don't work for the banks, but they do see them as the major driving force in Charlotte and we are considered, by most, to be a city of banking.

[palmetto75]

I've heard the same talk regarding Wachovia. Realistically I don't believe any of the domestic names being thrown around have ability to do it and when their fortunes change to the point that they would be able to one must assume Wachovia would be better positioned as well. My biggest question would be displacement of workforce. How feasible are the scenarios where a suitor buys Wachovia and then displaces a majority of the workforce into what would most likely be higher cost of living locations. Sure there would be 20-30% in staff reductions as a whole, but any synergistic savings would be eaten by displacement costs. Afterall the reason why BoA and Wach solidified their HQs in Charlotte was b/c it was an affordable place to do so. Would it be conceivable that the buyer moves its operations to Charlotte? It has been done before.

The banks have spent a lot of time and money making Charlotte an attractive place to live both for philanthropic, but also to help recruit and maintain their workforce.

[Charlotte_native]

I've heard the same talk regarding Wachovia. Realistically I don't believe any of the domestic names being thrown around have ability to do it and when their fortunes change to the point that they would be able to one must assume Wachovia would be better positioned as well. My biggest question would be displacement of workforce. How feasible are the scenarios where a suitor buys Wachovia and then displaces a majority of the workforce into what would most likely be higher cost of living locations. Sure there would be 20-30% in staff reductions as a whole, but any synergistic savings would be eaten by displacement costs. Afterall the reason why BoA and Wach solidified their HQs in Charlotte was b/c it was an affordable place to do so. Would it be conceivable that the buyer moves its operations to Charlotte? It has been done before.

The banks have spent a lot of time and money making Charlotte an attractive place to live both for philanthropic, but also to help recruit and maintain their workforce.