Wachovia exits wholesale mortgage lending

[Little Fish]

The elimination of wholesale lending is a good move by Wachovia. As you may be aware, when banks lend money, they must set aside capital per regulatory requirements. As I understand, the move is intended to better allocate existing capital, which is precious in the current credit environment.

Additionally, by focusing on existing customers of the bank, risk becomes easier to control since exisiting clients have deposits etc. housed in the bank and more is known about the client.

Looks like the market is reacting favorably... WB is up 17%.

Little Fish

 

[SHELLY]

Thank God I only have $132.77 in my Wachovia account!!!

....and you're not one of the 6,350 employees that are getting the axe.

.

 

[30ashopper]

....and you're not one of the 6,350 employees that are getting the axe.

.

..over 10,000 including contractors and open positions.

I read they might be thinking of trying to merge with somebody but there's nobody who can take on the debt and risk of the 4th largest U.S. bank. The other majors are all dealing with other tainted aquisitions.

 

[30ashopper]

Had to chuckle at this on Forbes

"Steel has no experience running a bank, but he did work at Goldman Sachs, and his contact there and in Washington might put him in position to broker a deal."

I could have sworn the first time I read it it went -

"Steel has no experience running a bank, but he did stay at a Holidy Inn Express last night, and his contact there and in Washington might put him in position to broker a deal."


http://www.forbes.com/2008/07/22/wa...ity-cx_md_0722markets29.html?partner=yahootix

 

[Little Fish]

Ash:

There is no comparison with the 30's. Regulation of banks is much stronger than the 30's. The only folks who compare today with the 30's are reporters looking for ratings. There is little reason for concern.

The Fed requires banks hold cash to support unexpected behaviors, ie. runs on banks. They consider 4% to be "adequately capitalized". The top 15 banks in the US are all "well capitalized" according to Fed guidelines. Wachovia's capital ratio is 8%, Citigroup is at 7.7%, JPMorgan at 8.3%, SunTrust at 7.3%.

Oh... and Sandy Pants... your money is secure.

No worries...

Little Fish

 

[SHELLY]

..over 10,000 including contractors and open positions.

I read they might be thinking of trying to merge with somebody but there's nobody who can take on the debt and risk of the 4th largest U.S. bank. The other majors are all dealing with other tainted aquisitions.

Not a problem...if they take BAC's led in their acquisition of Countrywide:
-----------------------------------------
Investors who own debt securities issued by Calabasas-based mortgage giant Countrywide Financial Corp., which Bank of America bought July 1, won't get a guarantee of repayment from the Charlotte, N.C.-based bank. "We don't intend to guarantee the public debt but we do understand the ramifications of not paying that maturity," said Joe Price, Bank of America's chief financial officer.

Bond investors are concerned that Bank of America will absorb the best assets of Countrywide while keeping as much as $38 billion of Countrywide debt in a new unit created by the acquisition, Red Oak Merger Corp., Bloomberg News reported.

The investors speculate that Red Oak could then file for bankruptcy protection, shielding Bank of America from liability.

http://www.latimes.com/business/la-fi-moneyblog22-2008jul22,0,7046859.story

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[sandybanks]

I try to limit my posting on this site much anymore but this is an interview with Dr. Paul Craig Roberts that I think many on this site will find very interesting.

[ame="http://www.youtube.com/watch?v=LfcNf5ghrFw"]YouTube - Paul Craig Roberts on the Alex Jones Show 24/07/08 P3[/ame]

 

[seal]

Ash:

There is no comparison with the 30's. Regulation of banks is much stronger than the 30's. The only folks who compare today with the 30's are reporters looking for ratings. There is little reason for concern.

The Fed requires banks hold cash to support unexpected behaviors, ie. runs on banks. They consider 4% to be "adequately capitalized". The top 15 banks in the US are all "well capitalized" according to Fed guidelines. Wachovia's capital ratio is 8%, Citigroup is at 7.7%, JPMorgan at 8.3%, SunTrust at 7.3%.

Oh... and Sandy Pants... your money is secure.

No worries...

Little Fish

And now for a different perspective.....

http://www.minyanville.com/articles/depression-california-housing-mortgage-time/index/a/18055.

I encourage any reader here to check out Kevin Depew's other articles.

And regarding the banking system, here is one man's opinion: http://globaleconomicanalysis.blogspot.com/2008/07/you-know-banking-system-is-unsound-when.html


The crash of 1929 was barely noticed by most Americans when it happened.

The major difference between now and the 1930's is that in the 30's, Americans could still use gold and silver as currency. Because of actions by Roosevelt and Nixon, Americans can only use Federal Reserve Notes as currency in the US. Does anyone really trust the very group the created this mess(The Fed) to be able to fix it?

And can anyone in real estate in the Panhandle say that real estate is NOT in a state of Depression?

 

[Bob]

And now for a different perspective.....

http://www.minyanville.com/articles/depression-california-housing-mortgage-time/index/a/18055.

I encourage any reader here to check out Kevin Depew's other articles.

And regarding the banking system, here is one man's opinion: http://globaleconomicanalysis.blogspot.com/2008/07/you-know-banking-system-is-unsound-when.html


The crash of 1929 was barely noticed by most Americans when it happened.

The major difference between now and the 1930's is that in the 30's, Americans could still use gold and silver as currency. Because of actions by Roosevelt and Nixon, Americans can only use Federal Reserve Notes as currency in the US. Does anyone really trust the very group the created this mess(The Fed) to be able to fix it?

And can anyone in real estate in the Panhandle say that real estate is NOT in a state of Depression?

we sold our house in TN. in nine days.....the sky is till up there.

 

[Miss Kitty]

we sold our house in TN. in nine days.....the sky is till up there.

...hey, Chicken Little, Bob has spoken!