I'm not an economist, nor do I know much about it, but I was just reading in a WRAL article about massive losses for Wachovia for the latest quarter. Says their stocks are at a 17 year low. Do you think this might cause a run on Wachovia like Indymac just had?

If this needs to be moved to the lounge, or chit chat, feel free to do so.

7/22/2008 1:21:05 PM

hooksaw is about to UNLEASH THE FURY on this thread.

http://www.thewolfweb.com/message_topic.aspx?topic=533915

7/22/2008 1:27:14 PM

eh, I thought I looked - oh well

IBTL

7/22/2008 1:28:59 PM

Quote :

"Wachovia posts huge loss, will cut 10,750 jobs"

http://www.charlotte.com/banking/story/723224.html

7/22/2008 1:30:24 PM

SCAREMONGER!!!1

7/22/2008 5:46:24 PM

TOTALLY IMPOSSIBLE

MOTHER MARKET WILL PROTECT THEM

100% GUARANTEED FACT

7/22/2008 6:20:07 PM

Couldn't have happened to a more deserving bank. They went to complete shit when First Union took over.

7/22/2008 11:16:14 PM

^ Agreed. And it's sad because I really liked them before they were bought out

7/22/2008 11:29:49 PM

fuck I bank with them

7/22/2008 11:31:24 PM

I really hope this doesnt scare people into removing their money.

7/23/2008 12:14:24 AM

As long as you've got under $100k in each of your accounts you should be fine. If that FDIC sticker means anything, anyway.

People will still make runs to get their money out so they don't have to put up with the hassle of waiting for the government to guarantee their money so they can take it out of their accounts again.

7/23/2008 12:18:42 AM

Their fall is phenomenal. Wachovia's stock was at 51 in October and now it's at 17, and that's _after_ the 27% bump up today.

Although I think Carl Icahn uses populist "Peter Principle" type rhetoric to win proxy votes, the following point from his blog rings especially true:

Quote :

"The way CEOs become CEOs in America is a travesty. This is one of our major problems. I use the anti - Darwinian metaphor. The survival of the unfittest. If you remember if you were in college the fraternity president was always there for you. When you had nothing to do or when you were a little depressed. Feeling down. You go to the club and the fraternity president would always be there. You wondered when he had time to study which he probably didn’t do very much of in school. He was there to sympathize with you if your girlfriend didn’t show up or didn’t call you back and you obviously sort of liked the guy because the fraternity president was usually a likeable guy. When the elections came up you would always vote for him. He had a couple qualities - the fraternity president. Politically, he was a survivor and he never made many waves. He did not promote controversy. Therefore when he went out into corporate America he was able to move up the ladder fairly quickly. Remember he survived, he didn’t make waves, and he wasn’t a threat. He kept moving up and up. Eventually he becomes the assistant to the CEO. The CEO had the same qualities. He’s a survivor. He’d never employ anyone underneath him who might be a threat. The boards like these guys… this type of CEO. The boards generally don’t own any stock (another problem with our system). The boards don’t really care to hold CEOs accountable. Remember it’s a symbiotic relationship. These guys pay the boards very well – they give the boards perks. The boards don’t care to hold them accountable because that might endanger the perks they love so much. When the CEO retires the assistant becomes the CEO. And remember what I told you. He’s a survivor. He would never have anyone underneath him as his assistant that’s brighter than he is because that might constitute a threat. So therefore, with many exceptions, we have CEOs becoming dumber and dumber and dumber. We can all see where this is going. It would almost be funny if it wasn’t such a threat to our ability to compete and to our economy in general."

(from his blog)

Of course the dumb CEO who brought this on Wachovia was Ken Thompson, a "career man" who worked at the bank for 32 years and found his way up the ladder. Granted he was a Morehead scholar and probably brighter than your average frat boy, but it's obvious over the last few years he acted like the prototypical "dumb" CEO -- in this case, following the sub-prime herd down a dark, dark road; in particular by engineering the Golden West acquisition.

Being competitive means differentiating, not riding asset bubbles. CEOs who don't focus on differentiation, who substitute big acquisitions for marketing, ultimately fail; not because of a "gamble" or a "risk" but basic bad business strategy. Unfortunately his failure won't be recognized as such.

7/23/2008 2:40:59 AM

Quote :

"The bank’s second-quarter loss includes a $6.1 billion noncash accounting charge, which has no impact on tangible capital levels, regulatory capital ratios or liquidity. Analysts had predicted that the charge, called a goodwill impairment charge, was largely related to Golden West."

Institutional investors understand what their quarterly report actually means.

Unfortunately, the average american has no clue, thus, this thread.

Carl Icahn is a shithead.

7/23/2008 7:13:02 AM

No thanks, I'm not that hungry.

So they lost 9 billion? Everyone with a Wachovia account should go to an ATM and make 10 one dollar withdrawals. Really rack up their overdraft fee.

7/23/2008 7:21:33 AM

Don't panic! They're diversified!

http://money.cnn.com/2008/04/26/news/companies/wachovia_mexico/index.htm?section=money_topstories

Quote :

"Feds look at Wachovia in drug money probe The bank is being investigated by prosecutors as part of a probe into alleged drug money laundering by Mexican and Colombian money-transfer companies, according to the Wall Street Journal. "

7/23/2008 3:02:32 PM

Quote :

"As long as you've got under $100k in each of your accounts you should be fine. If that FDIC sticker means anything, anyway."

To date no one has lost money in an FDIC insured bank regardless of the amount they had in and it looks unlikely that anyone will. There is no reason to let any depositors lose a dime at this point. It would only likely encourage other runs and more losses for the FDIC.

7/23/2008 3:45:31 PM