Wachovia, one of the more prominent banks that isn't based here in Philly but happily takes our money, just announced that it lost nearly $9 billion and is laying off 6,350 workers.
Do you think maybe this has something to do with it?
Wachovia has been suffering from its 2006 acquisition of Golden West Financial Corp. The bank paid roughly $25 billion for the California mortgage lender known for exotic loans.
The so-called "Pick-a-Payment" loans, which Wachovia inherited from Golden West, have proved a headache for the bank and a lightning rod for shareholders, defaulting at higher rates than other mortgages.
Wachovia recently discontinued offering the "Pick-A-Payment" loan option, which allows customers to pay a less-than-full interest payment on all new home loans. The bank also had hired The Goldman Sachs Group Inc. to conduct an analysis of its loan portfolio and advise it on strategic alternatives.
Why does the world seem to go completely off its rocker every 100 years or so. It happened in 1914.
It's happening now.
Posted by Will Bunch @ 9:07 AM
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45 comments
Well, since it was reported that the collapse and imminent collapse of a number of banks and lending institutions has had no discernable affect on CEO salaries, and since we know that this country's god is capitalism (that is, unless you are a financial institution, then apparently a little socialism and gov't intervention is good)....I would suggest a return to the F. U. C.(U)-center.
Ouch. When we were loan shopping back in the spring Wachovia tried to sell this product to us, even though it didn't make any sense due to our good financial standing and intent to pay in full each month. Wachovia's rates and fees were also high compared to other banks. I'm not sure how they're getting any mortgage business right now.
We should have a central government committee to decide on all salaries for all people in the US.
Why stop at CEO's. Athletes are really overpaid. Knock them down.
yeah because the govt would make everything fair? Clowns. Should we limit the amount of money small business owners make to. Or better yet limit the amount of money you make on inventions so no one is willing to take a risk and no progress is made. Yeah people had it great on the other side of the wall...
Well, he got part of the facts right. 8.9 billion was the official lose. But its all due to the Mortgage Dept. In fact the bank itself reported over a Billion in revenue. Get rid of the mortgage dept.
Secondly, one bank gets taking over becuase of a numbskull claims on cnn. Indymac is one of 8500 banks in this country and it was its consumers who basically allowed FDIC to take it over. It was the consumers who withdrew over a billion in one week, for FDIC to step in.
Ramon - that is called COMMUNISM.
I should have used the sarcastic font as that was my tone.
No one should have the government cap their earnings. I can't believe it's even a debate.
At the risk of a double post, (If the first one makes it through you'll see why I made the follow up). I guess that financial news is now supposed to be some sort of state secret, that consumers aren't cleared for. Who's to say the insiders at IndyMac wouldn't have pulled out their golden parachutes while smaller investors, blissful in their blankets of ignorance, didn't have an opportunity to bail out. Just like Enron.
This is what happens when the executive branch sleeps for 8 years. Or a even worse thought would be when they allow this to get this out of a control so a few can profit. Yes a few people did profit heavily in 1914.
As a follow up, since often I don't bother actually reading Will's posts (I just click on comments and see what's going on), this one was one of his gems. "Happily takes our money". Geez, what are they doing, taxing us? Depositors aren't getting paid interest? And that 100 years thing, that happened in 1914? Did the world go off it's rocker before then? But and pieces maybe, but no the world. I'm not even sure 1914 even qualifies as a worldwide off its rocker event. Maybe 40%, 50% if you'er generous. Even if you concede 1914 was a worldwide rockwer faller offer, didn't the world fall off it again only 21 years later, instead of a hundred? Take your time on the book.
"I can't believe it's even a debate." . . . . Ramon, you brought it up in response to LJL's observation about CEO salaries being constant even against massive bank losses. LJL didn't suggest there had to be a cap imposed by law, but it's certainly not communism for shareholders to demand such a cap in company bylaws, or even for consumers to vouice their frustration with those salaries. Are banks or any private enterprise immune from the free marketplace of ideas in which we all enjoy free speech?
Absolutely Correct Ramon - the government should not cap anyone's salaries. This is a market adjustment upon those very things. It will be painful for those of us in the middle, and VERY painful for those at the bottom but there will be a few (very few but they will be visible) that will literally lose millions upon millions.
Then you give it a year or two after we hit the bottom and things will start to recover, this time with a new (private though encouraged by government), clean energy driven New Deal.
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"Get rid of the mortgage dept." . . . . . And how exactly would they do that? Wave a magic wand?
"Huh? Whose money are they 'taking'?" . . . . . Yeah. I'm sure Wachovia keeps every Philadephian's money safely tucked in their own designated mattress. They don't do anything with that money at all, and every depositor can go there right now and take their mattress full of money back all at once. Yep, that's why we need an FDIC backed by taxpayer's money.
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Come on, Will, how did the world go off its rocker in the early 19th century? That was your point, wasn't it? Did it go off its rocker in the early 18th century? How can you put that little effort into the one little post you put in each day? You're almost in Larry Kane territory.
So, Senator Chuck Grassley is denied a delegate seat at the Republican convention. For me, that's the perfect metaphor for the self-destruction of what was once indeed a Grand Old Party.
What's with the S&W Black Beans product placement?
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Get off it, batboy, you're the poster child for hate.
Still waiting for your responses on the previous two threads, b.at... with Will only posting one a day now, they don't fall off as quickly, you know.
"Only a left wing dolt like MSL could contort the concept of voluntary, interest-bearing deposits at a financial institution to hiding money in mattresses." . . . . . . So then you agree batty, Wachovia does more than just hold a depositor's funds, as I put it sarcastically, in a mattress. They actually "take" it and invest it, and sometimes they lose it. Whether they do that "happily" is debatable I suppose, but if the bank folds and can't honor claims by its depositors, we all end up paying FDIC claims. If you want to pretend this never happens, be my guest.
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Hey, batty, you conveniently overlooked the 18 additional and distinct definitions of the verb "take" in your Merriam Webster. Why is that not surprising? Oh, here's one: 12a - to receive when bestowed or tendered. Oh, another: 6b to obtain or secure for use (as by lease or contract). Don't you feel silly?
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Batty, so, that WASN'T you that freaked over Will's innocuous use of the verb "take" and then assumed no one else had a dictionary handy? Okay, so then YOU DO agree, Wachovia "happily takes" money from its depositors. Sheesh.
Boooring,....,If a comment isnt thought provoking, entertainingly insulting, informative/educational or funny, it isnt necessary. This post could use some Richard French.
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"Unfortunately they won't make it past bunch's censors." . . . . Don't worry batty, what does get though still manages to insult our intelligence, but in an entertaining "kids say the darndest things" way.
"Yes, we all miss richard french...." Boy, there's a surprise. Republican lackeys bemoaning the loss of a chance to read fantasies about male body parts written by a lunatic.
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Point missed as usual, batboy.
I'm a loan officer and 4 years ago before the subprime collapse we all knew that these pick a payment loans were bad news, that's why I never sold one. The only borrower that it made sense for would be someone juggling mortgages on two different properties while waiting for one property to be sold off. At this point, you refinance the pick a payment loan or you pay the full principal and interest payment. The beauty is that these loans had pre-payment penalties on them. Real idiots running the banks in this country.
Banks are for suckers. I run elaborate pyramid schemes to make a living........speaking of ripping people off - please check out this blatant robbery of a local blog's photography by the liberals at the Daily News (http://phillyskyline.com/statement_080721.htm). The left wing editors at the DN used this photo on its front page, to accompany a story that the very web site whose image was stolen had scooped four days earlier. They even intentionally cropped where there were watermarks reading "phillyskyline.com". Disgraceful.
If Wachovia is like other banks I know, not only does it take money (for deposit and eventually return with interest), it also takes as much money as possible with fees and penalties. I had A.G. Edwards as a broker for many years, but when I learned that Wachovia had bought A.G. Edwards, I switched to a different broker--and this was before the most recent troubles. It has had a bad rep for a long time. I hope no depositers lose anything, but otherwise I think Wachovia deserves to go out of business.
BTW Will, if they lost $8B, maybe they aren't taking as much as you think.
"Boy, there's a surprise. Republican lackeys bemoaning the loss of a chance to read fantasies about male body parts written by a lunatic."
.....Point missed as usual TPasS
Hey batboy and others, how'd you like that history lesson McCain gave CBS yesterday? He credited the surge with the Anbar Awakening, when it actually started a couple monthst before the surge even became an idea, much less a reality.
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phillyskyline.com certainly has a case.. though there is a minor flaw. The original March 13 post said "All images courtesy of Walnut Street Capital and Kohn Pedersen Fox Associates.". The post was then updated with the image in question, and no additional attribution or citation was added. One could make the argument that the image in question appeared to be covered by the first attribution.
Oh, and phillyskyline.com should also learn about watermarks. The point of watermarks is to put them over prominent parts of the image so that they cannot be cropped out. That of course does not justify any infringement.
"Yeah, "capitalism" sure has worked wonders this decade." . . . . . Ah, no worries mate, Wall Street just needs a little hair of the dog. The Bush Oracle said so. Besides, it's all in your head, you whiners.
"He credited the surge with the Anbar Awakening, when it actually started a couple monthst before the surge even became an idea, much less a reality." . . . . . Yeah, as if the Sunni tribal leaders were so grateful for the surge that they joined our side. The Anbar Awakening was just one of many struggles between factions in Iraq, this time to defeat AIQ, which was seen not only as a rival for internal power but also as another excuse for the Americans to be there at all. We supplied them with weapons, against Maliki's wishes, who certainly has reason to fear Sunni fundamentalists with weapons.
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About Will Bunch
Will's book: Learn about it here and purchase it here.
Will Bunch, a senior writer at the Philadelphia Daily News, blogs about his obsessions, including national and local politics and world affairs, the media, pop music, the Philadelphia Phillies, soccer and other sports, not necessarily in that order.
Will Bunch, a senior writer at the Philadelphia Daily News, blogs about his obsessions, including national and local politics and world affairs, the media, pop music, the Philadelphia Phillies, soccer and other sports, not necessarily in that order.
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