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« McCrory's hidden assets | Main | GGO on the go »

Jul 22, 2008

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JAT

Ed, I continue to believe that Treasury and the Fed really do not want WB to be bought unless as a last ditch solution. Ergo, in our age of neo-nationalization of financial services, WB will not be bought. Yet.

Notice that Steel did something very cagey by keeping the exact extent of the Golden West charge current and future close to the vest, the better to scare off bargain hunters.

JAT

Roger Greene

I'd say that's now 2 times that a strong, Triad based company was bought by a company that was made up of shysters and/or incompetents who were lucky enough to have the cash to make the buy. The other was US Air. I'm not sure Lincoln is very far behind the other 2. When First Union bought the real Wachovia, you could see a clash of cultures from miles away as far as how they ran their companies. USless Air ruined another great Triad homegrown company, Piedmont Air.

Anonymous

Ed, if Wachovia is so doomed why has their stock jumped with Steel's moving forward plan? Maybe the Street approves and thinks he can right the ship rather than you (and other biz journalists) constant doom and glooming.

Ed Cone

Not sure what you mean by "doomed." People have suggested it might be acquired, which seems like one reasonable possibility, but that's not quite doom. Maybe the bank will find a way to remain independent; that would be a preferable option for North Carolina.

But the facts to date are straightforward enough: Wachovia has, in the wake of an acquisition that will be remembered as one of the most disastrous in American business history, taken billions of dollars in write-downs and losses, shed thousands of jobs, slashed its dividend, and fled a line of business. The stock price has been hammered by investors; the rally, triggered by a decision not to dilute the stock, still leaves any long-term shareholders well underwater, and will not have meaningful longterm consequences if that decision is reversed in the future.

All of this is rather big news in the banking industry and in North Carolina, and I don't see how reporting on it is in any way controversial.

Anonymous

Come on Ed you've zeroed in many times on Wachovia's problems-what about WaMu? City National? Citi? JP Morgan Chase? Even B of A got some guff over Countrywide (although the rumors are going both ways on that...)

All kinds of large banks are having write offs right now due to the mortgage/housing crisis. Your targeting of Wachovia seems to be based more in the First Union merger and the moving of the headquarters to Charlotte. And yes, Golden West has short term turned out to be a dog, but I bet in a few years Wachovia will be glad they're in CA though they paid too high a price for it initially. And the stock is recovering since the moving forward/job cut annoucement was made this week. Right now is the time to buy any financials as they will recover their value over the next few years.

All I'm saying is Wachovia isn't the only bank that has had problems. I think Steel will right the ship and they'll stay independent. For the sake of NC and Charlotte, we all better hope they do.

Ed Cone

I focus on Wachovia because it's a very sick North Carolina bank.

The Golden West deal was a disaster. Wachovia didn't just pay a ton at the worst possible moment, it bought a toxic mess.

You gloss over a lot of hard facts and overplay news that may or may not pan out.

I'd prefer a strong, independent, NC-based Wachovia, but I'm writing about the reality of the situation. There's nothing personal about it. If there was, I'd be a booster, as I know and like a lot of folks at Wachovia, from Lanty Smith on down. (I've probably written more about the woes of United Guaranty than any company, because it's a Greensboro company -- I certainly root for them on a personal level).

You are cheerleading, and doing it anonymously so we don't know all your motivations. Readers can make their own decisions on which style they prefer.

Former North Carolina resident

Good bye Walk all over ya, crooks for years before First Onion came smellling around the corner. I find that southern style banking sick, and yes the North is coming to ya cause this country has found that banks like Wachovia are the reason people hate banks.

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