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Things are not so good at the Banks

monsoon

By monsoon
in Charlotte

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ChesterCopperPot Unincorporated Area

ChesterCopperPot

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Wachovia has to much on the balance sheet to be acquired as is. They would have to sell off items/profitable business lines to become a target, something they might have to do in the near future to raise cash. Wait for that domino to fall. As far as profitability, current estimates sit around $1.50 per share in 2008 and around $3.00 per share in 2009, so they are still profitable - they just took a large charge last quarter.

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jme3 Unincorporated Area

jme3

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I see my post has been removed and justifiably so. In the interest of not leaving any enemies where I didn't intend to create them, I will offer some clarification:

Although my initial post in this thread was a direct quote of comments made by Tarheel79, my words were not intended as an assault on him personally but were rather an admitted rant directed broadly to address my perception of errant, unproductive ideas ( "as long as it doesn't affect my backyard I don't really care what happens in the rest of the country") that seem to be subscribed to by more and more people. My apologies are offered to Tarheel79 for the lack of clarity in my initial post and the reaction it caused.

To expound on the impetus for that post, I believe that the arena of international commerce / competition is for all intents and purposes a game just like any other, the point of which to engage in it is to win. If not then why bother? As far as the general industry of banking and Wachovia bank specifically are concerned, I do not see CitiCorp, Chase Manhattan, Bank of America, etc. as Wachovia's "real" competition. Undoubtedly they are rivals but they are rivals playing for the same political team so to speak. Rather, I see Wachovia's competition as the banks which are not headquartered in this country. If we subscribe to the school of thought that America's foreign competitors are as concerned for America's well-being and prosperity as they are their own, then a headlong embrace of globalism the way America has defined it is nothing to worry about. But I don't believe that the individual nation-state is anywhere near having outlived its usefulness in terms of its representing and defending a given peoples' interests and ideals. Yes, if Wachovia remains the headquarters city for the U.S. division of whatever foreign bank, it is indeed a zero-sum game for Charlotte and perhaps most of (?) the jobs would remain but the multiple billions of dollars in yearly profits that a healthy Wachovia has/would earn(ed) would make a beeline straight into the coffers of the home office overseas for them to distribute as capriciously as they like. Charlotte might remain economically and psychologically intact, but another very strategic pillar of overall US competitiveness and independence would be lost. And a chain is only as strong as its weakest link.

Again, this has been simply to clarify but as this has undoubtedly veered entirely off topic I'll let these be my last words on it.

Cheers!

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monsoon Gigalopolis

monsoon

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.... Rather, I see Wachovia's competition as the banks which are not headquartered in this country. If we subscribe to the school of thought that America's foreign competitors are as concerned for America's well-being and prosperity as they are their own, then a headlong embrace of globalism the way America has defined it is nothing to worry about. ......
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jme3 Unincorporated Area

jme3

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We seem to have crossed our wires somewhere as I'm afraid I'm a bit puzzled by what you're trying to say also... :huh:

If I've been unclear, I'll try to put it as succinctly as I can: my first wish would be for Wachovia to remain an independent company that gets its act together, remains headquartered in Charlotte and continues to provide stable employment with zero disruption for anyone. If that isn't possible, my next hope would be that it could be acquired by a domestic bank that would keep the assets in the US. The third option, buyout by a foreign bank, would not be desirable from my viewpoint in the slightest.

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Neo City

Neo

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BofA has made it to the Sweet 16 of the Consumerist's Worst Company in America matchup. Amazingly so has Countrywide which BofA is in the process of taking over.

Looks like we'll get to see the Bank of America and Countrywide showdown as they both made it into the "Elite 8" today:

wciaelite8.jpg

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monsoon Gigalopolis

monsoon

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Some of the comments on that website gives one the impression this is a bank not held in high regard by its customers. Certainly some of the articles about it should make anyone cautious about doing business with them. (especially for hidden and unexpected fees)

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JayGee Hamlet

JayGee

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that's what is on the street these days. However, another analyst said the sale of Wachovia would be a "low probability event"

with that being said, it's friday and more employees downtown were "displaced" today according to a co-worker of mine

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monsoon Gigalopolis

monsoon

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California Attorney General Jerry Brown and Illinois Attorney General Lisa Madigan have filed a lawsuit on behalf of the residents of their states against Countrywide Mortgage and it's CEO. The lawsuits claim Countrywide engaged in "unfair and deceptive" practices. If the lawsuits are successful it could result in billions of dollars of liability. There are also several other pending lawsuits from several states that accuse Countrywide of discrimination.

On June 11, the CEO of BofA, based here in Charlotte, said he was committed to purchasing Countrywide. (he really had no choice given the billions that BofA has already invested in this company. Today, the shareholders approved the buyout. The timing of the lawsuits was not a coincidence.

Thus these lawsuits are now the responsibility of BofA. BofA may end up having to pay restitution to everyone who had their home foreclosed by Countrywide. 1 in 10 people in the USA live in California and Chicago is the 3rd largest metro in the country so this will be a significant.

It amazes me how low BofA has sunk these days with it's business practices. Countrywide would have never been able to engage in this activity at this level, without BofA financing.

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swh1972 Hamlet

swh1972

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^

How do you figure that? CFC was the largest mortgage lender in the U.S. prior to their acquisition by Bank of America. And prior to BAC's purchase of approximately 17% of the outstanding equity shares of CFC back in August 2007, they didn't have a stake in CFC.

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