Monday, September 29, 2008

Wha' happened to Wachovia?

Well obviously they got bought by Citigroup with a little help from that great hedge fund, the American Taxpayer. But why the collapse? Well in 2006 Wachovia bought Golden West Financial Corporation who's specialty was mortgages where you didn't have to make all the payments. I am not making this up. From the above linked story:

"Wachovia has been among the banks hardest hit by the ongoing crisis in the mortgage market. It paid roughly $25 billion for Golden West at the height of the nation's housing boom. With that purchase, Wachovia inherited a deteriorating $122 billion portfolio of Pick-A-Payment loans, Golden West's specialty, which let borrowers skip some payments."

Lordy pie. Now me and Mrs. Angus own us some AIG, some Wachovia, and Lord knows what else without even lifting a finger. I sure hope some of Wachovia's senior management is kept on the job. They are aces.

Is this a great country or what?


br said...

Wachovia canned CEO Ken Thompson in June. He got a severance of $1.45 million and accelerated vesting of $7.25 million in restricted stock.

You got to know when to hold em, know when to fold em, know when to walk away, know when to run.

br said...

Funnier. The new CEO, Robert Steel, bought $16M worth of WB when he took over. Obviously his pension for high risk investment made him a good fit for the bank.

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