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Things are not so good at the Banks


monsoon

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^ I think the amount is closer to $1.9 Billion, but still substantial. I believe that there was a preferred stock issuance recently from Bank of America, so there are always ways to raise cash, but not sure if the two events were tied to one another.

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Ken Thompson.......cut

I'm sure many are rejoicing, though I bet it's going to be a rocky couple of months....now is not the time I'd want to take control of a bank, but the Board had to do something, so this was the obvious sacrafice to the Wall Street gods.

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It will be interesting to see what names start popping up. From some people at Wachovia that I know, the Chief Auditor has been mentioned as a possible succesor one day. But that was before this fiasco started a few months back. Hmm, I wonder how much Ken Lewis is rethinking that Countrywide acquisition now... I also heard from those working directly with this CW acquistion that it's 50/50 if this thing still goes through.

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Gee....I don't know how he is going to make it....poor Ken :rolleyes: His golden parachute will be too big to fit out of the penthouse windows of his CEO office. On a personal level it's embarassing to him I am sure but we won't be seeing him waiting in line at unemployment or at the already strapped family crisis centers in Charlotte. I have a lot more sympathy for the regular Wachovia employee who is at greater risk of losing their job because of bad decisions at the top.

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I saw on a news site that Wachovia has lost so much value in the stock market, including loses today that it is now worth what it was in July 1995. This means that First Union (Wachovia) has completely lost the net worth of the pre-merger Wachovia and then some. Amazing the worth of an entire bank as large as the old Wachovia can evaporate. It's like what happened when Mercedes took over Chrysler. (except I am not sure that Mercedes and First Union are a good analogy)

There is also an article on Bloomberg that suggests Wachovia is now a take over target...... "JPMorgan Chase & Co., Wells Fargo & Co., U.S. Bancorp and non-U.S. banks including Banco Santander SA may be looking at purchasing Wachovia, Hendler said. Wachovia's market value is about $50 billion."

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I saw on a news site that Wachovia has lost so much value in the stock market, including loses today that it is now worth what it was in July 1995. This means that First Union (Wachovia) has completely lost the net worth of the pre-merger Wachovia and then some. Amazing the worth of an entire bank as large as the old Wachovia can evaporate. It's like what happened when Mercedes took over Chrysler. (except I am not sure that Mercedes and First Union are a good analogy)

There is also an article on Bloomberg that suggests Wachovia is now a take over target...... "JPMorgan Chase & Co., Wells Fargo & Co., U.S. Bancorp and non-U.S. banks including Banco Santander SA may be looking at purchasing Wachovia, Hendler said. Wachovia's market value is about $50 billion."

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Monsoon, while you are correct its shareholder value has decreased in half, its assets have not decreased by nearly that amount. It is still the 4th largest bank in the US by assets and therefore a takeover is not likely. JP Morgan is too busying swallowing Bear, and WellsFargo and US Bank are not nearly big enough asset wise to purchase Wachovia especially during these down times. A foreign bank could handle this but I doubt that the US government will let a huge employer like Wachovia fall to foreign control during these hard times.

Lastly, while its stock value is aroun $23.50 a share, if it were to be purchased it would be closer to $40 a share due to its incredible amount of assets. Therefore I think this is more heresay than actual possibility.

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I don't think anything will happen immediately (Monsoon, you'll have to hold your glee :P ) but I think a sale is likely in the next year or so. I would hope for an acquisition by a foreign bank as that's much, much better for Charlotte than an acquisition by Wells or Chase.

It's like what happened when Mercedes took over Chrysler. (except I am not sure that Mercedes and First Union are a good analogy)

Not a good analogy. Daimler got out of the Chrysler deal with much of its market cap intact. Even though they lost money, they kept their independence as they cut Chrysler. Wachovia's (nee First Union) market cap is demolished and they are likely to be acquired and disappear as a brand.

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<< I would hope for an acquisition by a foreign bank as that's much, much better for Charlotte than an acquisition by Wells or Chase.>>

How is selling even more of this already precariously-positioned nation to foreigners "better" than selling to a domestic institution? There may be issues of market share violations that would apply to potential domestic suitors as opposed to foreign banks but that's a technicality that certainly needs to be addressed. I hardly see how the loss of even more of our sovereignty as a nation is a fair trade-off for Charlotte's aspirations to move up another rung on the international ladder...

The REAL issues that need to be addressed are the financial wantonness of the country as a whole, with not only the financial institutions at large but by the live-for-the-minute Americans themselves who barely have a penny saved for a rainy day. There is nothing praiseworthy about the recklessness with which this nation is handling its business and selling off the country piece by piece to the highest bidder is only digging the grave deeper.

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How is selling even more of this already precariously-positioned nation to foreigners "better" than selling to a domestic institution? There may be issues of market share violations that would apply to potential domestic suitors as opposed to foreign banks but that's a technicality that certainly needs to be addressed. I hardly see how the loss of even more of our sovereignty as a nation is a fair trade-off for Charlotte's aspirations to move up another rung on the international ladder...

The REAL issues that need to be addressed are the financial wantonness of the country as a whole, with not only the financial institutions at large but by the live-for-the-minute Americans themselves who barely have a penny saved for a rainy day. There is nothing praiseworthy about the recklessness with which this nation is handling its business and selling off the country piece by piece to the highest bidder is only digging the grave deeper.

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Point taken. The write offs they're having to do just might bring them down in the red for the first time I can remember.

I think they're going to have to sell off huge chunks of their mortgage business for a loss, but that's what you get for buying lots of shady mortgages just before the bubble bursts. I do think, however, that some people are overreacting to this whole thing. The housing market has needed a correction for some time, and the longer it was delayed the messier it was going to be. I think that Wachovia is strong enough in other areas to not only weather this, but bounce back strong once they've divested themselves from these bad moves.

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