Merger for Wachovia?

[Jane Eyre]

Source: The Charlotte Observer

In a potential blow to Charlotte's status as a major banking power, Wachovia is in preliminary merger talks with multiple suitors, according to reports Friday. It's the latest unsettling moment for the Charlotte bank, which is wrestling with bad mortgage loans and a depressed stock price.

Wachovia is in early discussions with Citigroup of New York, Wells Fargo of San Francisco and Banco Santander of Spain, according to The Wall Street Journal and The New York Times, which cited people familiar with the situation. Executives are exploring options, but aren't in a rush to do a deal, the Journal said.

The outcome holds major import for Charlotte, where the bank is one of the city's biggest employers and civic players, along with rival Bank of America. A merger could steal the city's claim as Wachovia's headquarters and pose possible layoffs among its 20,000 employees here.



Read more: http://www.charlotteobserver.com/100/story/217802.html

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This is a major deal here in Charlotte, rating the headlines of the Charlotte Observer this morning. The bank is building a new headquarters downtown along with an arts complex. If Wachovia is no longer headquartered here, it would leave a huge void in this town. Not to mention a lot of laid off employees.

[SmileyRose]

1. So Wachovia will either be owned by the Spanish or the Saudis?

[FreakinDJ]

2. and our homes by the Chinese

[happygoluckytoyou]

13. hope it isnt SPAIN.... McCain won't know who the spanish pres is when we need to borrow from them

[Jane Eyre]

3. Bob Steel, CEO

Bob Steel just became CEO of Wachovia on July 9 of this year, when he resigned from his position of Under Secretary of Domestic Finance at the US Treasury Department. Many people think that he was brought in to this position from the public sector specifically to oversee a merger of Wachovia Bank with another financial firm.

More on Steel below, including info about how he was previously with Goldman Sachs and has been instrumental in overseeing European privatization efforts:

http://en.wikipedia.org/wiki/Robert_K._Steel

[dixiegrrrrl]

5. Gee...what a co-incidence.

:sarcasm: :sarcasm: :sarcasm:

..."he was previously with Goldman Sachs and has been instrumental in overseeing European privatization efforts"

It is almost as if.....
they had all these takeovers planned,

[ananda]

4. The financial vultures are hovering, waiting..

.. for the FDIC kill so they can get
Wachovia cheap like JP Morgan got
WaMu, now ChaMu (Chase Mutual, lol).

Sue

[Eurobabe]

6. Krikky, that's my mom's bank which was PNB (?)

and my bank in VA which was Crestar. These banks have more lives than a cat!

[Jane Eyre]

7. Yeah, I once bought a CD at a small regional bank in Allentown

This was in the early 80's and I can't remember the name of the bank. But the bank was bought out, then that bank was bought out by another bank (I think PNB), which was eventually bought out by First Union, which then merged with Wachovia.

The funny thing was that I almost forgot about the CD (it was only a $500 investment at the time) and when I remembered it, I had moved to Charlotte and only had to go down the street to cash it in!

[Eurobabe]

8. Way back in the 80s my bank Hamilton Bank (small!)

was sold to Philadelphia National Bank. I think they were sold to First Union, which was bought out by WALK-ALL-OVYA. I hated that fucking bank! I went to a credit union after that and have stayed with them.

[tazkcmo]

17. ty

You mad me laugh. I needed that!

[Jane Eyre]

9. Bob Steel bought a house here

This was actually big news in Charlotte, that he had bought a house here. He also bought a lot of stock in Wachovia. All of this is supposedly to show that he is committed to staying in Charlotte and staying with Wachovia.

So, I guess we will soon see.

[Dr.Phool]

10. If Citi takes over, they can kiss my ass.

Wachovia is the first bank that I've ever enjoyed doing business with. The can kiss my savings, checking, and mortgage good-bye.

[rayofreason]

11. Wachovia going down..Fortis to follow

http://www.creditwritedowns.com/2008/06/fortis-latest-global-bank-in-trouble.html

The run up of home prices happened in Europe as well, so some of the same problems are happening there as well.

Worse yet, Europe has to invest a lot of money to pay back in pensions, but Europe is shrinking demographically. So that money had to go to places with long-term growth, like the US. The flood of money gobbled up a lot of the bad loans bundled together as mortgage-backed securities by Fannie Mae and Freddie Mac. So European banks are now being forced to consider huge write-downs of assets.

From what I hear Fortis could fail early next week, and then things will really get worse.

All of this can be traced back to Fannie Mae and Freddie Mac playing fast and loose with the numbers and encouraging banks to make mortgage loans with 0% down, interest-only, low-rate ARMs that adjust in a year or less! Lots of people with zero credit who had no business buying a house got loans, and many others got loans for purchases far above their ability to pay. All this extra cash chasing the existing housing stock drove up the prices to unsustainable levels.

The people running Fannie Mae and Freddie Mac from 2002-2008 should be investigated and charged with gross negligence. And those who aided, abetted and drove these policies in Washington should be exposed for what they have done. No matter what party.

Here is a quote from 2003 NYT article. ''These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis,'' said Representative XXXXX, the ranking XXXX on the Financial Services Committee. ''The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.''

Fill in the X's and feel sick about it. People knew, but those who wanted change were blocked by powerful interests.

Here is more - the banks throwing PARTIES for Congressional Representatives this year. 258 parties!!!!

http://sunlightfoundation.com/presscenter/releases/2008/09/24/financial-sector-fetes-lawmakers-making-bailout-de/

Throw the bums out. Both sides.

[sfwriter]

12. Desperate to avoid bankruptcy, aren't they?

It used to be that you would declare bankruptcy, reorganize and recover or get a fair sale price. Now, the government lives in terror of any records being revealed by a judge to show just how wide and deep the problem is. They will broker a seizure and sale to avoid that.

[happygoluckytoyou]

14. Guess they ain't gonna Watch-ova-ya any more..... GOD and Deregulators F'd em up!!

[regnaD kciN]

15. Think they'll be able to broker a merger...

...before the FDIC has to do it for them?

[Jane Eyre]

16. IMO, yes

I'm among those who believe that Bob Steel was brought in from the US Treasury Department specifically to bail out too-big-to-fail Wachovia. What puzzles me is that Citigroup would be considering a merger with Wachovia since I don't think that they are in any better shape. I'm betting that there are a lot of conversations between the Wachovia merger group meeting in New York and the Congressional reps in Washington this weekend. The bailout is part of the whole setup, if you ask me. I guess we will know more about how this will play out by Sunday night.

[TooRaLoo]

18. SWELL. Are YOU with Wachovia? nt

[Jane Eyre]

19. No

I have a lot of friends there though. Plus a checking account and an IRA.

The two major employers in Charlotte are Bank of America and Wachovia. Charlotte is the second largest financial center in the USA. There is more than just a lot of civic pride in that, it is the fact that the banks have literally built this city over the last few decades. Wachovia failing, or moving its headquarters elsewhere, would be a devastating blow for this city.