Wachovia has a new CEO (loans, houses, school)

[BrianH1970]

Originally Posted by TheEmissary

Brian - The only flaw in your statement, was that much of the same might have been said about Ken Thompson. I doubt he will be visiting a soup kitchen or living in a homeless shelter anytime soon. I'm a believer in paying people spectacularly well for spectacular results, but I think that much of the "salary resentment" is a result of those "golden parachutes" of CEOs who "failed" spectacularly. The average person will look at the "parting payout" and think "I could have done better than that" - and who knows, maybe they're right!

Yes, but keep in mind Ken Thompson also didn't inherit the mess that Robert Steel is inheriting. Now he can clean the bank up to remain independent, or he can clean it up just enough to sell. Either way, Wachovia obviously believes that they found their man to accomplish one or the other. They were the ones who sought Steel out, not the other way around.

[berryjuice4life]

Brian any luck on your job search? Are you already back in NJ?

[Carolina Blue]

Originally Posted by Miker2069

The stock price is 11.54...if anyone feels that it's going to be bought, now's the time to buy and hold...if it's bought i'd say it'll be in the low 30s/share...

And therein lies the challange. As most analyst have said, how does someone like say, JPM, justify to its shareholders paying that kind of premium for Wachovia (and again I say, look at JPM's stock). One of Wachovia's saving graces now is the state of the banking industry as a whole. I think they've lucked out of this one and will survive for some years to come. Their commercial and retail bank operations are strong, so they don't need help in those areas. They've got a CEO now with experience in the areas they need help, so like "most" people in Charlotte, I'm optimistic they'll work through this.

[anifani821]

Originally Posted by Carolina Blue

And therein lies the challange. As most analyst have said, how does someone like say, JPM, justify to its shareholders paying that kind of premium for Wachovia (and again I say, look at JPM's stock). One of Wachovia's saving graces now is the state of the banking industry as a whole. I think they've lucked out of this one and will survive for some years to come. Their commercial and retail bank operations are strong, so they don't need help in those areas. They've got a CEO now with experience in the areas they need help, so like "most" people in Charlotte, I'm optimistic they'll work through this.

Well, hope I am not straying off track here . . . but I am concerned about all the negativity about Wachovia. I think we all need to take a good look at what has occurred w/ Lehman Bro. and Indymac. Both have been impacted by the rumor mill. Yes - different situations - shorts w/ LB and run on money w/ Indymac. Even SEC acknowledges that the rumor mill affected BearStearns. So it seems to me . . . the best thing people can do is assume the new CEO at Wachovia is going to be a stabilizing force . . .If he can do that, then his salary is small potatoes compared to the destruction that could occur, should the stockholders, traders and depositors freak.

Lehman Brothers takes on rumors from 'the shorts' - International Herald Tribune

The banking regulator said it closed IndyMac after customers began a run on the lender following the June 26 release of a letter by Sen. Charles Schumer, D-N.Y., urging several bank regulatory agencies that they take steps to prevent IndyMac's collapse.

In the 11 days that followed the letter's release, depositors took out more than $1.3 billion, regulators said. (link below)

Regulators seize IndyMac Bank - USATODAY.com

[TheEmissary]

Originally Posted by anifani821

Well, hope I am not straying off track here . . . but I am concerned about all the negativity about Wachovia. I think we all need to take a good look at what has occurred w/ Lehman Bro. and Indymac. Both have been impacted by the rumor mill. Yes - different situations - shorts w/ LB and run on money w/ Indymac. Even SEC acknowledges that the rumor mill affected BearStearns. So it seems to me . . . the best thing people can do is assume the new CEO at Wachovia is going to be a stabilizing force . . .If he can do that, then his salary is small potatoes compared to the destruction that could occur, should the stockholders, traders and depositors freak.

Lehman Brothers takes on rumors from 'the shorts' - International Herald Tribune

The banking regulator said it closed IndyMac after customers began a run on the lender following the June 26 release of a letter by Sen. Charles Schumer, D-N.Y., urging several bank regulatory agencies that they take steps to prevent IndyMac's collapse.

In the 11 days that followed the letter's release, depositors took out more than $1.3 billion, regulators said. (link below)

Regulators seize IndyMac Bank - USATODAY.com

ani- I read the article about IndyMac. I will be sending them my "last mortgage payment" this month, a "really big one"! What concerns me is the amount of paper from Sallie Mae and Freddy Mac that both Wachovia and BoA holds. This may be adding fuel to an already burning fire! When Ben Bernancke starts sobbing at a future Congressional hearing, I'm going to start re-learning the words to "Brother, Can You Spare A Dime?" I'll be selling the apples for 5 cents at the corner of Trade and Tryon -see ya there!

[anifani821]

Originally Posted by TheEmissary

ani- I read the article about IndyMac. I will be sending them my "last mortgage payment" this month, a "really big one"! What concerns me is the amount of paper from Sallie Mae and Freddy Mac that both Wachovia and BoA holds. This may be adding fuel to an already burning fire! When Ben Bernancke starts sobbing at a future Congressional hearing, I'm going to start re-learning the words to "Brother, Can You Spare A Dime?" I'll be selling the apples for 5 cents at the corner of Trade and Tryon -see ya there!

If people panic, crazy things happen . . . and I do not want to be selling apples or ANYTHING ELSE on a corner in uptown Charlotte!!!!!!!

You may have heard this already today . . . but this morning either on CNN or Squawkbox . . . I heard that 50% of the mortgages in this country are held b/n Fannie Mae and Freddie Mac.

Nice little article (dated yesterday) on the mortgage debacle and Fannie/Freddie.

Mortgages: Why Fannie Mae and Freddie Mac Can’t Fail | Newsweek Voices - Daniel Gross | Newsweek.com

[chicagocubs]

Well, everyone has certainly voiced their opinions! I am also one that has this wait-and-see attitude. If Mr. Steel can bring Wachovia around and it is not closed like Indy Mac nor gov't controlled like Freddie/Fannie, then, I will be happy. I did a lot of research into that JPMC buyout and my opinion is the same as to why the long-rumoured Wells/Wachovia merger never happened. The cultures of the banks are too different. JPMC/Wells are actually a better fit, culturally speaking. City leaders here in Charlotte along with the board of directors are keen to keep the Wachovia culture intact as it benefits the City enormusly. That was Ken Thompson's thought process in the Golden West thing; because the culture of that thrift matched up with Wachovia's. OK...he should have paid more attention to the quality of the paper he was buying...(he sure did not ask any mortgage underwriters for their opinions!) but, that was the focus then and is now. It is no mistake that Mr. Steel is NC born/bred. Nor is it a mistake that he has ties with the previous Wachovia CEO. Additionally, his ties to the fed gov't will help with the image that WB currently has.

If he is able to figure out how to stop the losses, well, then, his performance-based salary will be worth it. He has already begun the feat of raising capital without selling off stock or diluting the current assets any more than what they already have. That really should be his first focus.

Hopefully, this will not be a bank that will make headlines as being the next one that closes it's doors. Charlotte would be devastated, especially since BOA would not be far behind with it's purchase of Countrywide. These are tough times, people. Time to really brace ourselves. Not panic, but, be prepared. We don't know where this is going.

[TheEmissary]

Originally Posted by anifani821

If people panic, crazy things happen . . . and I do not want to be selling apples or ANYTHING ELSE on a corner in uptown Charlotte!!!!!!!

You may have heard this already today . . . but this morning either on CNN or Squawkbox . . . I heard that 50% of the mortgages in this country are held b/n Fannie Mae and Freddie Mac.

Nice little article (dated yesterday) on the mortgage debacle and Fannie/Freddie.

Mortgages: Why Fannie Mae and Freddie Mac Can’t Fail | Newsweek Voices - Daniel Gross | Newsweek.com

ani - Many banks, including our own biggies, hold a lot of that paper. Most banks thought it was as safe as holding T-bonds and bills. As the old Hertz commercial used to say, "Well, Not Exactly"! Taxpayers of America would be the source of the bailout of SM & FM. Not a very reassuring thought! Trillions would be needed to bail them out. The mortgage rate-resetting problem is only about 1/3 of the way through its cycle. The Feds are starting to remind me of the old NJ politicians who have spent that place into such a debt-ridden horror that it would make Jim Black seem like a paragon of financial wisdom and virtue!

[BrianH1970]

Originally Posted by chicagocubs

Well, everyone has certainly voiced their opinions! I am also one that has this wait-and-see attitude. If Mr. Steel can bring Wachovia around and it is not closed like Indy Mac nor gov't controlled like Freddie/Fannie, then, I will be happy. I did a lot of research into that JPMC buyout and my opinion is the same as to why the long-rumoured Wells/Wachovia merger never happened. The cultures of the banks are too different. JPMC/Wells are actually a better fit, culturally speaking. City leaders here in Charlotte along with the board of directors are keen to keep the Wachovia culture intact as it benefits the City enormusly. That was Ken Thompson's thought process in the Golden West thing; because the culture of that thrift matched up with Wachovia's. OK...he should have paid more attention to the quality of the paper he was buying...(he sure did not ask any mortgage underwriters for their opinions!) but, that was the focus then and is now. It is no mistake that Mr. Steel is NC born/bred. Nor is it a mistake that he has ties with the previous Wachovia CEO. Additionally, his ties to the fed gov't will help with the image that WB currently has.

If he is able to figure out how to stop the losses, well, then, his performance-based salary will be worth it. He has already begun the feat of raising capital without selling off stock or diluting the current assets any more than what they already have. That really should be his first focus.

Hopefully, this will not be a bank that will make headlines as being the next one that closes it's doors. Charlotte would be devastated, especially since BOA would not be far behind with it's purchase of Countrywide. These are tough times, people. Time to really brace ourselves. Not panic, but, be prepared. We don't know where this is going.

Bank of America already f**ked themselves going through with the Countrywide purchase (sorry, ain't no other way to put it). I'm sure it won't be too long before those repercussions are felt.

Talking about cultures, in serious conversation, the culture around Wachovia has changed from where it was even a year ago. Chicagocubs can speculate about the cultures between JPM and Wachovia not being a good fit. A year or so ago he'd most likely be right. As of today I'm not so sure. Things aren't the same as they were. If someone told me a year ago that I'd be able to buy a share of Wachovia stock for about the price of an extra cheese pizza, I would've told them that they're nuts. Yet now it's a little less than 12 bucks a share.

Like I said, it's not hard to connect the dots with this new CEO to see where they may be going with all of this. It seemed like a day or so after Steel accepted the position, analysts started talking about him possibly prepping the bank for viewing, especially since there are provisions built into his contract as to how he'll be compensated if the bank is merged or sold. The board kept that door open.

Ani's right though. Even if Robert Steel's best intention is to keep Wachovia independent, which it very well could be, any market jitter could shatter the bank. If he keeps this bank independent, that 38 million wouldn't be enough compensation. He may as well be guiding the Andrea Gail through "The Perfect Storm" right about now.

[TheEmissary]

Brian - With all the shareholders onboard, you might want to replace the Andrea Gail with the Andrea Doria.