Charlotte could lose Wachovia (and B of A) HQ (Tryon: job market, buy)
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From what I'm hearing, "if" may be replaced with "when" on both counts at some point in the not-too-distant future. The word "merger" should not even enter into this scenario. Fact is that if anything is done by JP Morgan it's not going to be a merger but a buyout. Em and NCguy are right. If we use history as the indicator as far as the purchaser and the purchased, that big securities building on Tryon and it's other operations centers nearby have become an even more unstable house of cards.
Hey, Brian! This should be an interesting situation to watch . . .
Location: Charlotte,NC, US, North America, Earth, Alpha Quadrant,Milky Way Galaxy
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Originally Posted by TheEmissary
It seems to me that when a bank is taken over by a bigger entity, that a large portion of the white-collar jobs at that bank get "wiped out". Layoffs of 25-50% of the institution being accquired are not uncommon. My former mortgage company went through a 25% layoff recently. The purchase of "Golden West" by Wachovia seemed like an idiotic decision to me at the time, and I've never been a banker or "played one on TV"! If I could see through the "housing bubble" in 2005, I can't for the life of me, see how "supposed" professionals missed it - my old NJ house couldn't keep going up in value 25% a year forever!! If Wachovia is sold and it's Charlotte employees laid off, it will be the fault of incredibly stupid and greedy management.
Everyone missed it though, Wachovia, BoA, etc., all bought what turned out to be very bad purchases.
Everyone missed it though, Wachovia, BoA, etc., all bought what turned out to be very bad purchases.
What did BOA buy that was a bad purchase? The only "bad" purchase people are discussing is the Golden West from Wachovia.
And in general anytime you have an aquisition/merger you will have layoffs, thats part of the cost savings. And these are occuring not so much because of greedy management, but the Banks are losing money now. Yes some of the C's are making way too much, but alas, thats with every big company. Lets just hope whateevr happens to Wachovia it is positive and maybe Charlotte won't be affected too much.
Location: Some got six month some got one solid. But me and my buddies all got lifetime here
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Quote:
Originally Posted by Whytewulf
What did BOA buy that was a bad purchase? The only "bad" purchase people are discussing is the Golden West from Wachovia.
They're going through with the Countrywide deal. That's their big deal in question right now. The reason why people are so gung ho with talking about Wachovia and Golden West? Look no further than what happened to Wachovia's CEO because of that deal.
Last edited by BrianH1970; 06-23-2008 at 05:16 PM..
They're going through with the Countrywide deal. That's their big deal in question right now. The reason why people are so gung ho with talking about Wachovia and Golden West? Look no further than what happened to Wachovia's CEO because of that deal.
Brian - Remember a couple of years ago when Countrywide could do no wrong? It seems like BoA drank their Kool-Aid (with the Jim Jones' secret ingredient) all too easily! BoA has yet to see their "chickens" come home to roost! I think by the end of the year, they'll be cryin' the blues.
The bad thing that comes with bank consolidation is that the surviving institutions feel free to increase their fees - no longer held back by competition. They seem to be taking more cues from the airline industry. I'm afraid that by the time that the few lucky Wachovia employees eligible to be transferred to a new place, get on the plane at Charlotte-Douglas, they'll discover the new "Fee-to-Pee" charge has been instituted by every major carrier and the ATM fee from their old employer has doubled.
Brian - Remember a couple of years ago when Countrywide could do no wrong? It seems like BoA drank their Kool-Aid (with the Jim Jones' secret ingredient) all too easily! BoA has yet to see their "chickens" come home to roost! I think by the end of the year, they'll be cryin' the blues.
The bad thing that comes with bank consolidation is that the surviving institutions feel free to increase their fees - no longer held back by competition. They seem to be taking more cues from the airline industry. I'm afraid that by the time that the few lucky Wachovia employees eligible to be transferred to a new place, get on the plane at Charlotte-Douglas, they'll discover the new "Fee-to-Pee" charge has been instituted by every major carrier and the ATM fee from their old employer has doubled.
Brian - Remember a couple of years ago when Countrywide could do no wrong? It seems like BoA drank their Kool-Aid (with the Jim Jones' secret ingredient) all too easily! BoA has yet to see their "chickens" come home to roost! I think by the end of the year, they'll be cryin' the blues.
You might have the BofA deal mixed up with Wachovia’s. When Wachovia announced they were buying Golden West the big argument was that Golden West didn’t have significant exposure to sub prime loans. Of course, that proved to be wrong. However, BofA’s purchase of Countrywide was announced at the height of the current mortgage mess. They knew exactly what they were getting into. But the price for the company was so low, their management used it to justify the buy. And I’d have to say I agree. At the end of the day, BofA will be one of the largest mortgage lenders in the country, and its not like people are going to stop buying houses. And BofA has already cut their dividend once and placed more shares to try and offset mortgage losses. So they're already having to deal with the mortgage problems, just like all the other banks; which btw are all dealing with declining values (anyone check JP's stock lately).
You might have the BofA deal mixed up with Wachovia’s. When Wachovia announced they were buying Golden West the big argument was that Golden West didn’t have significant exposure to sub prime loans. Of course, that proved to be wrong. However, BofA’s purchase of Countrywide was announced at the height of the current mortgage mess. They knew exactly what they were getting into. But the price for the company was so low, their management used it to justify the buy. And I’d have to say I agree. At the end of the day, BofA will be one of the largest mortgage lenders in the country, and its not like people are going to stop buying houses. And BofA has already cut their dividend once and placed more shares to try and offset mortgage losses. So they're already having to deal with the mortgage problems, just like all the other banks; which btw are all dealing with declining values (anyone check JP's stock lately).
BoA did take a risk in buying Countrywide knowing that they were "troubled" to put it mildly. Whether they're successful in the end, will depend on not hemorrhaging so much capital in the interim, that it does them long-lasting damage.
If they manage to pull it off and come out smelling like a rose, I expect the "Bank of Everywhere" to emerge! All those illegal immigrants they gave mortgages and credit cards to, will find they have to sell their firstborn child into permanent "indentured servitude" as bank tellers, if they are late for a payment. All this info will be in a friendly "Change in Terms of Service" agreement requiring an electron microscope to read!
Well, just to clarify, Bank of America hasn't even closed the Countrywide deal, and $4/6Billion is a lot less than $26Billion. So yes they know exactly what they are getting into. So if they can get out of of the Bank trouble like everyone else they should be ok.
I wouldn't worry about too much consolidation, there is tons of competitiion out there, and Citi, JPMorgan, BofA, Wachovia, Wells, are Huge, and tons of midsize banks just on the retail side. Lots of articles out there showing that we aren't even in the biggest Bank crisis over the last 20 years. But alas, heading down the wrong path on this topic. Whether you like them or not, they are both good for Charlotte.
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If I could see through the "housing bubble" in 2005, I can't for the life of me, see how "supposed" professionals missed it - my old NJ house couldn't keep going up in value 25% a year forever!! 
If Wachovia is sold and it's Charlotte employees laid off, it will be the fault of incredibly stupid and greedy management.
