Wachovia: $8.66 Billion Loss
Submitted by
CalculatedRisk on Tue, 07/22/2008 - 5:21am (54 comments)
in
Shopping at Amazon?
Wait! If you click on the Amazon banner link at the top of the page first, HCN will get a percentage of anything you purchase for 24 hours!
Open predictions
Our local book authors
User login
Who's online
There are currently 43 members and 204 guests online.
Currently online
- Rob Dawg
- Elvis
- shill
- energyecon
- Dickeylee
- Pearl
- Mook
- fudge_hend
- Vic
- Eric
- sum luk
- JBR
- Whiskey
- ac
- Comrade Janošik
- Buck Eschaton
- dingojoe
- Antipodes
- Bubblisimo Gerkinov
- Cinco-X
- Mary
- azurite
- JimPortlandOR
- some investor guy
- ResistanceIsFeudal
- Cobradriver
- curious
- aleister perdurabo
- Lurking Lawyer
- 1 currency now -yogi
- GrandOldTurkey
- Oman
- Counterpointer
- Mert717
- RATM
- Haralambos
- Comrade Elmer Fudd
- Hackman
- silvertoes two
- JP
- mos maiorum
- Duke of Con Dao
- rickrolled
Recent Recommendations
Repost the question, any thoughts on dollar intervention being on the menu today?
Is it Friday already
Robdawg are you going to be right on who the next Indy?
If the FHA starts have bigger problems as shown by the link below:
The Mortgage Lender Implode-O-Meter News Pick-ups: The FHA Delinquency Crisis: 1 in 6 Borrowers in Default
Welp, no houses for many first time buyers. You see, if wages ain't rising and credit can't be obtained easily....
Its contained!
Tis a flesh wound!
YouTube
- Monty Python And The Holy Grail- The Black Knight
So did it or did not beat the analyst estimates?
With all the financials about to or going down in the US, who is going to sponsor the major golf tournaments in years to come?................
Does anyone have thoughts on the fact that Wachovia did not take a goodwill impairment charge on its Golden West acquisition? Does anyone else think it is scary that the $6.1 billion in writedowns was mostly due to commercial loan impairments?
Well they had to save an excuse for the 10 billion writedown next quarter. Can't blow all your dry powder in one shot.............
Lost $4.20 per share. Wow.
The omen continues.
Zero!
Does anyone have thoughts on the fact that Wachovia did not take a goodwill impairment charge on its Golden West acquisition?
I missed that, is this true? I would have thought that Steel would want a kitchen sink quarter, and would ditch anything that doesn't affect bank ratios.
In the confessional:
Priest: 'we are doing expresssline confessions today, so whatever you did is excused'.
Repentent: Thank you father.
Priest: Next!
Lost $4.20 per share. Wow.
The omen continues.
LMAO.
And again, I still cannot tell what the omen portends.
Yes, but was it less than expected. If so...buy buy buy.
Cheers,
The U.S. government wants authority to provide capital for embattled mortgage finance enterprises Fannie Mae and Freddie Mac to boost market confidence but has no immediate plans to use that authority, Treasury Secretary Henry Paulson said on Tuesday
No plans to infuse GSEs with capital: Paulson
| Reuters
Translation: We will be anouncing that next week. Back to you Hank
So this puppy goes this Friday?
Are does old Bernie have still a few more weekends yet left in him?
SKF was a gift at $130...
I'm too chicken.
you know you're done when MW puts you on deathwatch:
A virtual receivership for Wachovia MarketWatch First Take - MarketWatch
Wachovia is suspending wholesale lending as of Friday.
Wachovia holds my mortgage. This makes me a bit vaguely uncomfortable for some reason.
Cheers,
Looks like the PPT woke up early today. Dow only down 30.
Bizzarro world has struck again!
JP: Im not totally sure, but I think it has something to do with lots and lots of Americans sitting in their folk's basements and staring at the wall.
What I'm wondering is this: How many banks will hit the pipe? And does the FDIC have enough juice? If not, then what...bail the FDIC? With what?
I smell death in the air...or really really good weed. I pray it's just weed.
How about RE market chatter - when does Boston Properties (BXP) report?
Interesting Times, You'll probably get your chance for $30 again.
Currently Smoking Cannabis
I smell death in the air
Currently, you had better go upstairs, make sure your mom is ok...............
Fitch Bitch slaps Wachovia:
Fitch Downgrades Wachovia's IDR to 'A+'; Outlook Negative - Bloomberg.com
Fitch Downgrades Wachovia's IDR to 'A+'; Outlook Negative
NEW YORK--(BUSINESS WIRE)--July 22, 2008 Fitch Ratings has downgraded the Issuer Default Rating (IDR) for Wachovia Corporation (Wachovia) and its subsidiaries to 'A+' from 'AA-'. Fitch has also removed Wachovia from Rating Watch Negative where it was originally placed on June 27. The Rating Outlook is Negative. A complete list of ratings can be found below.
The rating downgrade reflects the increasingly pronounced asset quality deterioration evident in Wachovia's mortgage portfolio, specifically the Golden West-originated Pick-A-Pay (option ARM) product, and the resulting pressure created by this asset class on the firm's financial flexibility. Fitch anticipates Wachovia's reported financial performance in the next few quarters will fall short of normal run-rate expectations for a franchise of Wachovia's diversity, depth and rating. The Negative Outlook recognizes that although Fitch believes that Wachovia has attempted to incorporate a conservative view of potential future collateral deterioration, exogenous factors, including home price indices, can deteriorate significantly in a short period of time that may necessitate or accelerate additional meaningful charges and reserve building by Wachovia. The magnitude of such charges and potential impact on capital could result in a further downgrade of Wachovia's ratings. Conversely, Wachovia's financial performance may recover more quickly if expected losses do not fully materialize. Fitch expects to re-evaluate Wachovia's Rating Outlook over the next few quarters.
This market is absolutely hilarious. Do I hear The Doors "This is The End" playing in the background as the flames spread? WTF!! Talk about denial. I'm beginning to think Jas is right. Born and bred. Jas, where are you?
@ JP
According to the Bloomberg report of Wachovia's earnings, the bulk of the writedown was from commercial loans. The company chose not to take a goodwill impairment on Golden West because of the "value of retail branches." So, I guess $15 billion goodwill impairment coming next quarter?
No Bob it is the "On with the show this is it" jingle from Loony tunes that you are hearing............
Canadian: Being self-employed, I'm set to have more fun than the average Joe. Other dudes can only get laid off once. I, on the other hand, will get to experience the joy of termination dozens of times if this thing really cuts loose. Some of my clients already have me a tad nervous.
Treasury Secretary Henry Paulson said on Tuesday that America's housing market could turn a corner and begin recovering within months
Housing to turn corner within months: Paulson
| Reuters
Translation: We are probably a couple of years away from a bottom in housing and the a flat line for several years after that but i have to say something the people in the Astoro Dome are getting restless. Back to you Hank.
Currently no disrespect man, just trying to carry on with your sarcasm theme.............
Oil trader SemGroup LP, which billed itself as the 14th-largest privately held company in the United States, filed for bankruptcy on Tuesday
Oil trader SemGroup LP files for bankruptcy-filing
| Reuters
They shot Shorty!
None taken. I should have added a "LOL."
I've already taken a 25% haircut since last summer. And I didn't even get a free cardboard box or an escort to my car.
At what point does the market just stop believing Hank?
CSC,
Same situation...But 50% haircut...
That's why I'm thinking of farming...
A little rock reminder...the damage is done
YouTube -
Milkman,
When the bond market collapse occurs.
cd: I've already started farming. Here in the OC, on a 6000 sq ft. lot, I've got a small farm up and running. We've cut our food bill in half already. But it's taken 3 years to get that far. I don't know what the fine folks on the postage stamp cement lots will do.
WB did not take enough impairment charges for the World sale. The exit from wholesale is/was the remaining products they have from that wonderful "purchase". Now if they didn't take a large enough charge but got rid of the products (that were conservative IMO) what do you think is the next shoe to drop??
Ciao
MS
sorry that should have read GW instead of World....I can't keep my "buying at the top" companies straight...they are the same thing though...
Ciao
MS
Golden West was supposed to provide a thick stream of...income.uh oh.
WB up now on the day! Yay, the world makes sense!
What is "goodwill impairment" ?
"goodwill impairment" = elitist mode wherein individuals are adverse to Goodwill stores
WOW, see my wife and i got tired of their BS check processing scheme (comuoter program) to make multiple overdrafts and therefore charges, so we left. Looks like they really needed those fees....
BS= Bull sit not Bear sterns
It's where a company makes a ill-timed investment (at the extreme top) can put the costs in an area that seems to be not really related to the actual purchase. It sounds better than "we lost XXX billions on our horribly timed purchase"
Because it's "goodwill"
Ciao
MS
of course this will be bad for SKF since this just thins the herd! God I hope not.
"Goodwill" is the abstract/intangible value of an acquired company (vs. its real assets like cash, equipment, etc.), largely having to do with it's perceived value by the public. Brand names are often a big part of this (think "Kraft", "Tide", "Frigidaire"). When a company is bought for say $10BN but only has $5BN of real assets, there's an implied goodwill value of around $5BN, which is added to the book value of the new parent company. If that company is later sold (or shutdown) that goodwill has to come off the book of the parent.
Wow.
Wachovia stock is up 9% on the news. Interesting short squeeze going on today.
They lost $8.66B in retained earnings and yet the market value went up $7B in one day. That makes sense.
Great reasons to buy Wachovia, or any other loser company at this point. Or is it? Only value to be found at all in the markets is from short squeezes, hype, index manipulation, etc. How will
the holders of this junk feel in another
few quarters?