[Heineken]

A lot of funny money sloshing around at Wachovia. Where does this end?? link

[ohcomeon]

Oh, no, that'll be the proverbial last straw, I think...

I'm headed to the bank.

[smallpoxgirl]

Apparently a lot of financials are hurting this morning. link

[jbrovont]

Link (Bloomberg)

[deMolay]

If you Read the article carefully you will note, that before each collapse there were massive Billions in withdrawals of cash. That is a bank run friends. Why is the media not reporting it as such.................................

Wachovia Slips Amid Speculation Citigroup, Wells Fargo May Bid
By David Mildenberg and Linda Shen
Sept. 26 (Bloomberg) -- Wachovia Corp. fell in late trading amid speculation that record losses tied to mortgage loans may force the bank into a merger with Citigroup Inc., Wells Fargo & Co. or Banco Santander SA.

Wachovia dropped to $8.90 at 6:12 p.m. today from its $10 close during regular New York Stock Exchange trading after the New York Times reported that New York-based Citigroup was in early talks to buy the Charlotte, North Carolina-based bank. The Wall Street Journal said bids may come from San Francisco-based Wells Fargo and Spain's Santander.

Takeovers can wipe out bank shareholders if they occur after regulators seize the company. That's what happened yesterday to Seattle-based Washington Mutual Inc., the nation's biggest thrift and now the largest bank failure in history. JPMorgan Chase & Co. paid $1.9 billion for deposits and branches of WaMu, leaving the company with about $28 billion in debt according to Bloomberg data and little means to pay it off.

``Washington Mutual showed that one of the big ones can go down, and if you are looking at who else in the top 10 is facing the most pressure, Wachovia is right there,'' said Stan Smith, a banking professor at the University of Central Florida in Orlando.

WaMu was taken over by regulators yesterday after customers of the Seattle-based lender withdrew $16.7 billion from accounts since Sept. 15. The savings and loan was ``unsound,'' the Office of Thrift Supervision said. The collapse came as lawmakers planned to meet again after talks on Treasury Secretary Henry Paulson's bailout reached an impasse.

Deal, No Deal

The Times said there's no guarantee negotiations between Citigroup and Wachovia will result in a deal, citing people briefed on the matter. The Journal, citing a person familiar with the talks, said officials are also courting Wells Fargo and Santander even though they don't believe their bank is short on cash and don't see any need to rush into a deal. Earlier talks with Morgan Stanley broke off.

Citigroup spokeswoman Christina Pretto declined to comment on the Times report. Santander's Peter Greiff declined to comment on the Journal's report, as did Wells Fargo's Julia Tunis Bernard.

Fears of mounting losses on Wachovia's $122 billion in option adjustable-rate mortgages helped push the Charlotte, North Carolina-based company's shares down by 64 percent this year before today's trading. Chief Executive Officer Robert Steel sent an e-mail to employees today saying he's ``optimistic'' about the government rescue package.

Steel's Statement

``The Treasury plan under consideration by Congress and the fact that the WaMu situation was smoothly resolved for its customers are two constructive and important steps toward restoring confidence in the financial system,'' Steel wrote in the e-mail, which was confirmed by the bank. ``We are aggressively addressing our challenges and are working to strategically strengthen and manage capital and liquidity in this challenging environment.''

Louise Pitt, a credit analyst at Goldman Sachs Group Inc., wrote in a report today that Wachovia may face the possibility of a ``silent'' run on deposits similar to that confronted by WaMu, in which customers fearful of a bank failure withdraw their money in unusually large numbers.

Outflows could come because of ``negative industry headlines and fear among retail customers,'' Pitt wrote in a report today. The bank has about $391 billion in core deposits out of a total of $436 billion, said Pitt, who cut her rating on Wachovia to ``trading sell'' from ``outperform.''

Christy Phillips-Brown, a spokeswoman for the bank, said the company doesn't comment on analyst reports. She noted that the bank has opened 745,000 retail deposit accounts since June, a 6 percent increase from the average daily sales rate in the first half of the year. Customers have also reinvested their certificates of deposits with Wachovia at a faster clip than during the first half of the year, she said.

To contact the reporters on this story: Linda Shen in New York at [email protected]; David Mildenberg in Charlotte at [email protected] Last Updated: Sep 26, 2008 18:13 EDT

[Cashmere]

Smells like dead baboon in here.

WB is finished. It's doubtful even a bailout could help them now.

[BigTex]

Aren't ALL banks in our system insolvent?

Isn't the whole problem with our banking system that they borrow short and lend long, and never have sufficient reserves to pay back their depositors?

[GeneralGreen]

Indeed it appears Wachovia is the next in line if the bailout dont happen soon.
FYI Wachovia is bigger then WaMu.
Also talk of Citi going under...."if Citi goes under it will be mass panic"

[mos6507]

There are enough warning signs with these banks that people with half a brain have already moved their money out by the time the collapse happens.

[dorlomin]

Wachovia is the last suvivor of the lists of the big banks to go early.

Now its a waiting game to see how the likes of Wells Fargo, Citi, JP Morgan and Bank of America fare. Wells Fargo and Citigroup seem to be the most vaulnrable of that lot.

[ReverseEngineer]

Wachovia is the last suvivor of the lists of the big banks to go early. Now its a waiting game to see how the likes of Wells Fargo, Citi, JP Morgan and Bank of America fare. Wells Fargo and Citigroup seem to be the most vaulnrable of that lot

Wells Fargo is next.
Reverse Engineer

[Sixstrings]

CEO MESSAGE
September 26, 2008

Dear Wachovia Clients, Shareholders and Friends,

Financial markets and our industry are undergoing unprecedented change. We are watching these events carefully and must plan and remain flexible. Therefore, we are strategically protecting and managing liquidity and capital in this challenging environment.

Wachovia has many advantages: excellent service across our businesses, an exceptional retail franchise renowned for customer satisfaction, one of the largest brokerage platforms covering the affluent markets and expertise to meet the specialized needs of our many corporate customers.

Our core franchises are extremely valuable and continue to operate well relative to our competition.

We remain optimistic that our leadership in Washington will provide comfort to the markets with a plan to stabilize the housing and short-term funding markets.

For years Wachovia has been a forward-thinking force to help fuel business growth, create and manage personal wealth and build strong communities. We intend to remain focused, continue serving customers like no other competitor and utilize our many skills and talents in order to protect the value of our franchise.

Thank you for your trust in Wachovia.

Sincerely,



Robert K. Steel
President and CEO

[Niagara]

Here's the draft version, just prior to release...

CEO MESSAGE
September 26, 2008

Dear Wachovia Clients, Shareholders and Friends,

Financial markets and our industry are undergoing unprecedented change. We are watching these events carefully and must plan and remain flexible. Therefore, we are strategically protecting and managing liquidity and capital in this challenging environment.

Wachovia has many advantages: excellent service across our businesses, an exceptional retail franchise renowned for customer satisfaction, one of the largest brokerage platforms covering the affluent markets and expertise to meet the specialized needs of our many corporate customers.

Our core franchises are extremely valuable and continue to operate well relative to our competition.

We remain optimistic that our leadership in Washington will provide comfort to the markets with a plan to stabilize the housing and short-term funding markets.

For years Wachovia has been a forward-thinking force to help fuel business growth, create and manage personal wealth and build strong communities. We intend to remain focused, continue serving customers like no other competitor and utilize our many skills and talents in order to protect the value of our franchise.

There is nothing to worry about folks. There is absolutely NO NEED to panic and [s]run[/s] walk to your local branch to withdraw all of your funds. I repeat, there is NOTHING TO WORRY ABOUT.

Thank you for your trust in Wachovia.

Sincerely,



Robert K. Steel
President and CEO

[Starvid]

Wouldn't it be great fun if all the banks merge into a single bank which then fails and is then saved by Warren Buffet, or the US government?

I don't know which would be the funniest, Warren Buffet or the US government owning all American banks.

[Cashmere]

CEO soothing?

Always a sign that the death throes are upon us.

[DantesPeak]

The government's template on WaMu was to allow all the stockholders plus all the bondholders to be completely wiped out before the FDIC would spend any money.

This is a change from F & F, and AIG where bondholders were preserved.

Going forward, due to public unhapiness with bailing out so many, the WaMu template will be in effect.

Therefore it will be almost impossible for Wachovia to sell stock or borrow any more money (other than pledging good assets, if it has any).

It could only be saved by the new bailout plan, and only then if the value of its marked-down assets is greater than its debts.

Other banks now will be forced to go to the bailout fund.

Being there will be so many losses reported at the end of the third quarter, if the new bailout plan doesn't get out of the starting gate in a day or so, we may see the financial meltdown continue.

[Newfie]

Sorry to be stupid here but....

When you talk about people taking their money out are you talking about investors or depositors?

I thought I heard that in the WaMu takeover the depositors were made whole?

What is the depositors situation with Wachovia? Any ideas?

Thanks

[JDSalinger]

This is unfortunate, but it should serve as a wake up call to all American investors. If you want to protect your money, you need to diversify and invest at least some of it overseas. These are hard times for American investing firms. I personally use offshore bank accounts and they have helped me with diversification and asset protection. If you want to read more on why offshore investing is smarter, feel free to visit my website.

Best,
Frank Miller
http://www.theoffshorebankaccount.com

[BigTex]

Money is safe in treasuries. That's why treasury rates are so low.

If you're scared, put your money in a 100% short term treasuries money market account.

Treasuries are safer than any offshore investment. That's why all the offshore money is parked in treasuries right now.

[dorlomin]

This is a change from F & F, and AIG where bondholders were preserved.

From what I understand this should trigger some CDS' should it not?