Wachovia/FU

They sure can pick 'em can't they? Those guys should just stay out of the M&A business. They suck at it. First CoreStates and now Golden West. Slicing 4% from its dividend and needing to raise an additional $7 billion in capital.

 

When will this be a BUY? Wondering about the stock price. SEEMS the worst is over. That Pick a Pay mortgage had disaster written ALL over it.

 

Stock is down over 40% if not more since the purchase. I'm not positive it has hit bottom yet due to all the California exposure in GW. I'd wait a little longer on this one.

 

At least through July. There's more coming. Wealth Management is the only sector making money for Wachovia. Mostly, they're investing in European and Asian companies and stocks.

 

I've heard that as well about Wealth Management being the only one making money. They are in lots of trouble because I don't think they are half-way through the Golden West mess like they are trying to say they are. Negative Amortization really comes back to bite you when the real estate is going down in value and don't believe the "they were capping the negative amortization" line. That line is from the same company that said in January they would not cut their dividend rate. Think about this, they bought Golden West for 24 billion with a heavy California Portfolio and many of those with the Pick A Payment (negative am.) product. Bank of America bought freaking Countrywide for 4 billion with an earlier 2 billion investment as well. Freaking 1/4th the price for a better name and overall better portfolio of mortgages especially outside the subprime area.