Wachovia Corp. may be takeover bait -- what bank isn't? -- but after its disastrous summer drop the stock is up over 100 percent from last week's low, and new CEO (and old Wachovia hand) Robert Steel discouraged talk of selling big parts of the store at today's conference call, after tolling 6,000+ job cuts (Bloomberg story here.)
  Keefe Bruyette & Woods analyst Jefferson Harralson: "Would you guys consider selling" Wachovia's Securities, the big stock brokerage?
  Tom Wurtz, Wachovia CFO: "This is a core part of our business...It just seems like a great business for us to continue to drive and grow."
  Nancy Bush, NAB Research LLC: "You mentioned a review and sale of non-core assets. Could you just give us an idea?"
  CEO Steel: "We're looking at everyhing...There are certainly things and businesses that are not central to what we do...I think I would really like it if you just give me a bit of pause here, for me to buy a bit of time, and I think we'll try to give more context and structure to this, you know, in the next couple of months..."
  Shares rose $3.61 today, to $16.79. 2q earnings here.
  
   

  Analysts queried CEO Charles O. (Chad) Holliday Jr. about DuPont's M&A plans in today's 2q earnings conference call.
  Kevin McCarthy, BofA: "The chemical industry is seeing two large multi-billion dollar deals so far this month (Dow-Rohm and Haas; Ashland-Hercules)...You've said, credit market dislocations may provide some opportunity... Could you elaborate on DuPont's latest thoughts?"
  Holliday, DuPont: "Look at our 2010 forecast. We'll be looking for acquisitions to get to that. We've been net divestors over the last several years as we cleaned our portfolio... It's the right time to adjust for that...
  "But again, we are not talking about some big massive acquisition, we think that would be very disruptive."
  DuPont shares rose $1.16 to $45.21 today after posting strong 2q numbers. DuPont earnings info here.

  General Electric is pulling out of credit cards and appliances, but it just picked up $8 billion in Abu Dhabi oil money to invest in Middle Eastern development projects. Bloomberg story here.

  When it comes to buying banks, $300 million isn't what it used to be -- it's a lot more, says Jim Lynch, the veteran Philadelphia bank executives who's set that target for his Patriot Financial Partners LP fund, with partner Kirk Wycoff.
  Bank stock is changing hands at roughly par to tangible book value, "or less," down from about 1.5X last year, and down as low as bank values were back in the S&L crisis of nearly 20 years ago, Lynch says. "We can buy the same share of a $1 billion-asset bank that we thought we'd be buying from a $500 million-asset bank" a year ago.
  Lynch is betting values will jump to 2.5X book (not counting goodwill) "in a very quick period of time, once we shake out this real estate problem." 
  In that light, Sidhu Capital's decision to trim its fund sale to $90 million from an earlier $150 million doesn't look like a retrenchment, Lynch added. "A lot of guys are sitting on the sidelines." Sidhu is Lynch's old Sovereign Bank boss, Jay Sidhu, who plans to buy companies whole, while Lynch and Wycoff just want a big chunk of each bank they back. Lynch praised Sidhu's "passion" for the business, and says there's room for both approaches: "At these numbers, we feel real good."

 

  Philadelphia Federal Reserve president Charles I. Plosser tells a King of Prussia audience the economy isn't as bad as feared. Unemployment will rise. But inflation's a bigger worry, he says. Plosser speech here. Inquirer story here.
  From Plosser's  Q&A:  Philly home market "in reasonably good shape" compared to high-foreclosure California, Las Vegas, Florida, auto-recession Michigan. "I wouldn't say it's booming," but home values are stable here, "except for the Jersey Shore," which has a hangover.
  "Unemployment is going to continue to rise between now and the end of this year," following last year's business slowdown. "We will have to raise rates before unemployment peaks."
  The Fed has two jobs, which sometimes conflict: "We have to keep the financial system functioning" by helping banks stay in business (= low interest rates), while also "ensuring financial stability" by fighting inflation (= high rates).
  Fed money today is so cheap that "real interest rates are negative," and we haven't seen the full impact of the Fed's recent rate cuts. "They will be felt down the road" as businesses spend more, fueling inflation.
  Will oil prices stay high, and the dollar stay weak? "That is the big question." Usually price swings "end up reversing themselves." Better to slow the economy with higher interest rates so other prices stay low, than to rev up the economy with cheap money and risk creating across-the-board inflation.
   The $25 billion Fannie Mae-Freddie Mac bailout "is the consequence of creating institutions that create moral hazard." Fannie and Freddie enjoy taxpayer backing, so they funded too many bad home loans. "They took on extra risk because they had this backstop...Some would argue, we should never do that." 
  Can we afford higher interest rates? Yes: "Economic conditions have not turned out nearly as dire as some people have predicted." (Plosser's predictions here.)
  The Fed has set up unprecedented funds to help investment banks; is that permanent? "At some point there'll have to be a decision: Do these go away? Or will there have to be a legislative solution? The Federal Reserve is not intentionally seeking to extend its powers." The Fed shouldn't regulate everyone; there'll always be "shadow" players who resist any system. "It's a really tricky balancing act...We're making many changes in the heat of battle. I hope we can be careful and analytical." 

  Gatehouse Holdings LLC, Berwyn, says it bought and closed Amalfitano’s Bakery, New Castle, Del., and added its product lines to Gatehouse’s D’Ambrosio’s Bakery in Philadelphia’s Grays Ferry section. Terms not disclosed. 
  The deal brings D'Ambrosio's into Delaware and Maryland, said Gatehouse managing director Christopher D. Jansen, a former SunGard Data Systems executive who is now D’Ambrosio’s president.
   D'Ambrosio had a tough opening in Delaware, according to the Wilmington News Journal. Story here. Jansen blames hot weather (bread is heat- and humidity-sensitive) and the usual merger dislocations.
   Amalfitano's founder Louis Amalfitano died last year, and company owners and leaders including Amalfitano's son Joe faced record wheat prices and an expiring lease, Jansen said. 
  Amalfitano’s employed around 15. Head baker Joe Amalfitano and several bakers and drivers have been hired at D’Ambrosio’s, which plans to open warehouse depots to support the new routes.

  Biotech deals still hot: Roche offers $44B for Genentech. Bloomberg story here.
  Smart people are betting $1 trillion that stock prices will keep falling. Story here.  
  Investor Stanley Druckenmiller dreams what he'd do if he takes over the Steelers. Story here.
  Yahoo rolls over for Carl Icahn. Story here.

  We're still waiting for word on Wilmington's Buccini brothers' taxpayer-assisted plan to build middle-class Delaware Riverfront housing in rundown Chester City. 
  Meanwhile, a nearby Chester Township lot is being peddled as a taxpayer-subsidized studio site, with Main Line-based director M. Night Shyamalan as auteur-in-chief. Philadelphia Daily News story here. 
  We hope, if only for the sake of those involved, that Shyamalan's finances (and the taxpayers') survive the weak results of his recent movies.
  Lawyers in heat: Wolf Block could be absorbed by a larger Florida firm. Why do law firms need to be so big? Inquirer story here.
  What made you think he doesn't like being single: “I’m still interested. The industry would be better served if it was less fragmented. But we are fine on a stand-alone basis,” US Airways' CEO Douglas Parker told the Inquirer's Linda Loyd. “US Airways does not need a merge to be a viable airline.” Inquirer story here, NYT Dealbook cites Inquirer on USAir here.

  Tough time to raise a lot of investment capital. Former Sovereign Bancorp CEO Jay S. Sidhu is trying to raise $90 million for his Sidhu Special Purpose Corp., which would invest in banks. That's down from his earlier plan to raise $90 million. New SEC July filing here; old April filing here.