Wachovia Has Record $8.9 Billion Loss

July 22nd, 2008

WARNING: This is not a recommendation to buy, sell or hold any financial instrument.

If Wachovia goes down, it would wipe out FDIC liquidity about 16 times over. That calculation is based on the following numbers: Wachovia’s assets, $808 billion, divided by $49 billion, which is roughly what the FDIC may or may not have on hand.

Do you still keep money in a U.S. bank account? Yeah, me too. I have about $89 in mine. * hint *

Via Bloomberg:

Wachovia Corp., the U.S. bank that hired Treasury Undersecretary Robert Steel as chief executive officer two weeks ago, reported a record quarterly loss of $8.9 billion, slashed the dividend and announced 6,350 job cuts. The stock fell as much as 12 percent in early New York trading.

The second-quarter loss of $4.20 a share compared with net income of $2.3 billion, or $1.23, a year earlier, the Charlotte, North Carolina-based company said today in a statement. The loss included a $6.1 billion charge tied to declining asset values.

The writedown, job cuts and second dividend reduction in three months reflect Steel’s response to the worst housing market since the Great Depression, which cost former CEO Kennedy Thompson his job after eight years. Wachovia has dropped more than 75 percent in New York Stock Exchange composite trading since it spent $24 billion two years ago to buy Golden West Financial Corp. just as home prices were peaking.

Posted in Economy | Top Of Page

3 Responses to “Wachovia Has Record $8.9 Billion Loss”

  1. pdugan says:
    July 22, 2008 at 5:01 pm

    It rallied pretty well this morning, and the news didn’t take out the support. I’ve got about the same quantity of money in a Wachovia account, but the collateral damage of them going down would be much more costly in an intangible capital sense.

    I think they’re too big to fail, and the C-levels are doing their damndest to keep it going. We’ll see.

  2. Druff says:
    July 22, 2008 at 8:24 pm

    Thanks for another nudge re: the bank situation. I wonder if you’d have any advice on what to do with the money from our bank and retirement accounts, etc.

  3. pookie says:
    July 23, 2008 at 5:08 am

    Well, lookee here. Why do y’all think the FDIC felt the need to put up this page?

    http://www4.fdic.gov/dip/index.asp

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