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Wachovia posts record $8.9 billion quarterly loss

Started by morganb · 11 months ago

Buying World Savings (a/k/a Golden West) appears to have been a terrible decision as Wachovia took a $6.1 billion charge related to declining asset values on its way to posting a $9 billion loss for the quarter.  In addition to suspending it’s wholesale lending department, the bank is slashing jobs, dividends and non-core businesses in [...] ... Continue reading »

7 comments

  • Aaron Fischer

    11 months ago

    Makes one wonder if Countrywide will prove to be to large a bite for BofA as well.
    reply
  • Coco Lopez

    11 months ago

    Wachovia's been on a drunken binge of acquisitions for years. This had to come around and bite them sooner or later. They can close their wholesale window but it still won't save them from themselves.
    reply
  • mikew

    11 months ago

    Wachovia is in big trouble. This is what you get when managaement can't stop buying new banks and lenders. I remember when they were First Union bank. They came into Philadelphia to buy Corestates (who had already purchases too many banks). They promised the great city of Philadelphia that they would keep the home office in Philly. As soon as the deal closed they shut down philadelphia headquarters.

    Sorry for no tears they were a greedy greedy bank.
    reply
  • Fielding Mellish

    11 months ago

    This makes me wonder how many of the Option ARMs we've been expecting to implode starting in late 2008 have already gone bad. The much-viewed chart shows Option ARM resets ramping up in 2009 and cresting in 2011, but how many of those Option ARMs have already gone bad or will have gone bad prior to their big reset at the end of five years? Could it be that borrowers, seeing themselves upside-down, have been ceasing to pay even the neg am payments on their loans and have gone into foreclosure already? Is that why Wachovia has posted a loss due to Option ARMs - or are they "merely" marking to market their Option ARM portfolio or taking write-offs for estimated future losses (based upon dropping home values)?

    I keep wondering whether we will really see a jump in Option ARM foreclosures over the next four years - or are we seeing them already, while they're still in the neg am phase?
    reply
  • Ann

    11 months ago

    I know someone right now who has $5 million dollars in option arms..imagine that explosion..oh by the way..80% of it is in properties that are in declining markets..
    reply
  • Doug

    11 months ago

    14% ? Who are they kidding ( or lying to ) ?

    80% of the owners of these loans pay the minimum payment. Id bet that most if not all of these loans are upside down.
    reply
  • Ann

    11 months ago

    The attraction for the bank with the neg ams is that they got to book the difference between what the collected on the lowest tier payment and the added balance each month to the loans as INCOME...or course this income never existed and as they have had to write down the values of this loans they are now de-booking the fake income..it only goes to show you that this company was NEVER a 40 dollar stock but is now at what it should be and even lower for value..
    reply

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