JPMorgan Chase & Co.: Wachovia Yum!!

[Sapiens]

http://www.bizjournals.com/southflor...23/daily2.html

CNBC report links Wachovia, JPMorgan

JPMorgan Chase & Co. has placed Wachovia high on its radar screen for a potential acquisition, CNBC reports, citing insiders with the New York bank.

A spokeswoman for Wachovia couldn't be reached for comment.

On June 2, when Ken Thompson was ousted as Wachovia chief executive officer, several Wall Street analysts speculated the move could lead to a sale of the bank, with JPMorgan (NYSE:JPM) identified as the most likely buyer.

Wachovia has been hit by a string of bad news in recent months. The company's financial woes have revolved largely around its massive exposure to the declining mortgage market, a byproduct of its 2006 acquisition of Golden West Financial Corp., a California thrift that specialized in nontraditional, option-adjustable-rate mortgage loans. The deal put Wachovia in California and other Western states, but the bank bought the thrift at the peak of the mortgage market and has become swamped with defaulting mortgage loans.

Thompson recently conceded the acquisition was poorly timed.

The bank also recently cut its dividend to 37.5 cents per share from 64 cents per share while raising $8 billion in new common and preferred stock, which diluted the value of existing shareholders' stock.

However, there are roadblocks to a possible acquisition. The deal would bring the combined bank above the federal deposit cap that prevents a bank from controlling more than 10 percent of all U.S. deposits. JPMorgan already has 7 percent of those deposits, and Wachovia has 6 percent, CNBC notes.

Even without such a sale, Charlotte-based Wachovia (NYSE:WB) is facing a period of significant change that some analysts view as a chance to improve the bank's earnings but others expect will mean more uncertainty.

Thompson is the most recent top U.S. bank executive to lose his job following months of upheaval in the credit markets. Charles Prince retired in November as Citigroup Inc. CEO and chairman, and Stanley O'Neal left the top post at Merrill Lynch & Co. Inc. in October.

Wachovia's stock closed at $17.43 per share Friday, down 1.9 percent from Thursday's closing price of $17.77 per share.

Wachovia stock has traded between $16.15 and $53.41 over the last year.

Wachovia is the largest bank in South Florida, with 233 branches, $25.1 billion in deposits and a market share of 16.78 percent as of June 30, according to the Federal Deposit Insurance Corp.

Statewide, Wachovia has 754 offices, nearly $60.6 billion in deposits and a market share of 16.21 percent as of June 30, according to the FDIC.

[c1ue]

Re: JPMorgan Chase & Co.: Wachovia Yum!!

Sapiens,

So what are the chances of the 10% law being changed "to help the credit crisis"?

[Sapiens]

Re: JPMorgan Chase & Co.: Wachovia Yum!!

Sapiens,

So what are the chances of the 10% law being changed "to help the credit crisis"?

Clue, my gut tells me anything goes.

I had lunch today with a close friend that works at the mother of all banks, I was told to batten down the hatches. They know its coming, but they really have no concept of how bad can it really get.

At a high level meeting it was stated that if worst comes to worst the masses can be give benefits cards to get the life essentials in order to control civil unrest.

Like I said, they have no concept if that is the worst they think it can get.

[c1ue]

Re: JPMorgan Chase & Co.: Wachovia Yum!!

Sapiens,

Yes, your gut and my historical gleanings are saying the same thing.

It will be unfortunate if Dr. Michael Hudson's solution: mass unemployment mitigated by a WPA II is used instead by a financial oligarchy for its own purposes rather than the infrastructure rebuilding pre-WW II.

I feel better and better for having moved assets offshore.

[loweyecue]

Re: JPMorgan Chase & Co.: Wachovia Yum!!

I am a first time poster here so please pardon the naivette, but are you both predicting a run on the banks of some epic proportions?

[FRED]

Re: JPMorgan Chase & Co.: Wachovia Yum!!

Clue, my gut tells me anything goes.

I had lunch today with a close friend that works at the mother of all banks, I was told to batten down the hatches. They know its coming, but they really have no concept of how bad can it really get.

At a high level meeting it was stated that if worst comes to worst the masses can be give benefits cards to get the life essentials in order to control civil unrest.

Like I said, they have no concept if that is the worst they think it can get.

Try these on for size.

[Andreuccio]

Re: JPMorgan Chase & Co.: Wachovia Yum!!

Try these on for size.

Fred, two questions about the charts. First, what does the scale along the right side represent. I see it's a ratio of nonperforming loans vs. total loans, but what does "1.00" mean?

Second, while the rate is shooting up, it still seems well below the peaks hit in '86 and '92. It doesn't seem to be panic time quite yet. Or is it?

[FRED]

Re: JPMorgan Chase & Co.: Wachovia Yum!!

Fred, two questions about the charts. First, what does the scale along the right side represent. I see it's a ratio of nonperforming loans vs. total loans, but what does "1.00" mean?

Second, while the rate is shooting up, it still seems well below the peaks hit in '86 and '92. It doesn't seem to be panic time quite yet. Or is it?

The 1.0 means 1%. In the 1986 to 1992 cycle, 90 days past due loans peaked at 4%. Now they are at 1.5%, still low but the continuous, parabolic y-o-y increase is without precedent. The $300M to $1B banks are getting hit especially hard.

[c1ue]

Re: JPMorgan Chase & Co.: Wachovia Yum!!

I am a first time poster here so please pardon the naivette, but are you both predicting a run on the banks of some epic proportions?

First, don't sell yourself short!

Don't believe automatically what anyone tells you - look around to see if what you're told makes sense in the context of what you do already know firsthand.

As for a run on the banks - what I'm looking at is a system failure in the US financial sector. This doesn't mean money there will disappear, but it does mean a major driver (perhaps THE major driver) of the US economy in the past 10 years is no longer going to contribute.

It also means a significant possibility of the US government having to directly intervene to preserve the sector - more than already has been done.

If this chain comes to pass, the effects on the US dollar will be catastrophic.

Losing your money because the bank it was in failed is one thing, but your money losing its power to buy what you need is completely different.

In the first case, you have both FDIC and the ability to move to a healthy bank before the failure occurs.

In the second case, you cannot avoid it at all unless you move your money out of the dollar.

Think of gasoline as an example: while the price of gasoline in dollars has tripled in 5 years, the price of gasoline in Rubles has only increased 30%. Interest rates here are 3%, in Russia they are 10%. Hmmmm.

As for Andreuccio's question:

Think in terms of economic time. We're now in the 3rd inning or so; the actual recession hasn't even been acknowledged yet and still we are seeing such nasty numbers.

Or in terms of the charts: we're in the mid 1989/early 1995 stage.

Scared yet?

[GRG55]

Re: JPMorgan Chase & Co.: Wachovia Yum!!

...At a high level meeting it was stated that if worst comes to worst the masses can be give benefits cards to get the life essentials in order to control civil unrest.

Like I said, they have no concept if that is the worst they think it can get.

Forget about benefit cards. The masses are being given something MUCH more effective...:rolleyes:

Individual Gun Rights Protected, Top U.S. Court Says

By Greg Stohr
June 26 (Bloomberg) -- A divided U.S. Supreme Court ruled that the Constitution protects individual gun rights, striking down the District of Columbia's handgun ban and raising election- year questions about weapons restrictions elsewhere...
http://www.bloomberg.com/apps/news?p...gSk&refer=home