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Our tech team has launched updates to The Nest today. As a result of these updates, members of the Nest Community will need to change their password in order to continue participating in the community. In addition, The Nest community member's avatars will be replaced with generic default avatars. If you wish to revert to your original avatar, you will need to re-upload it via The Nest.
If you have questions about this, please email help@theknot.com.
Thank you.
Note: This only affects The Nest's community members and will not affect members on The Bump or The Knot.
Looks like Wachovia may be next
They are predicting it's failure by middle of next week. Those of you who are interested, don't panic but check this article.
Re: Looks like Wachovia may be next
where did you hear that about wachovia?
i don't have time to really read that right now as i have to get ready to leave soon but most of my family and h's family bank there
Blog!
Googled it.
http://www.nytimes.com/2008/09/27/business/27bank.html?hp
Wachovia, Looking for Help, Turns to Citigroup
By BEN WHITE and ERIC DASH
Published: September 26, 2008
As concern spread Friday that more banks might run into trouble even with a $700 billion rescue for the financial system, Wachovia, one of those hardest hit by the housing crisis, became the latest to reach for a lifeline.
Wachovia has a $120 billion portfolio of mortgages loaded with adjustable interest-rate loans that allow borrowers to skip part of their monthly payments, much of which it inherited from its ill-timed acquisition of Golden West, the big California lender, at the end of the housing boom in 2006.
In July, the bank hired Robert K. Steel, 56, a former vice chairman at Goldman Sachs, from the Treasury Department, where he worked with Treasury Secretary Henry M. Paulson Jr., trying to resolve the mortgage market crisis. Mr. Steel vowed to keep Wachovia independent and sought to raise $5 billion in capital over the next year by selling noncore assets.
But the bank?s shares, which are down nearly 80 percent in the last year, plunged 27 percent Friday, to $10, as investors wondered about its health after the government?s seizure of Washington Mutual on Thursday.
?Wachovia has a real problem,? said Len Blum of the investment bank Westwood Capital. ?Option ARMs are probably the worst mortgage products out there and Wachovia has a lot more of them than it has in tangible equity.?
A spokeswoman for Wachovia, Christie Phillips-Brown, said: ?We are aggressively addressing our challenges and are working to strategically strengthen and manage capital and liquidity in this challenging environment.? The bank, she added, expects ?that the Treasury plan under consideration by Congress is a constructive and important step toward restoring confidence and stability in our financial system.?
The discussions involving Wachovia and other banks came as Congress sought to break an impasse over the rescue plan proposed by Mr. Paulson, which would buy soured assets from troubled banks to prevent further failures. But no matter what a final package contains, analysts say it is unclear how much it would help a number of regional and community banks stretched by falling home prices.
?The Treasury Department plan will not prevent more bank failures,? said Chip MacDonald, a lawyer who advises banks at the law firm Jones Day. ?The plan proposes to make purchases based on market prices, which are likely to be at a loss to the sellers. Such losses will deplete the sellers? capital, which only strongly capitalized institutions can absorb without raising additional capital or a merging with a stronger bank.?
The Federal Deposit Insurance Corporation deemed 117 banks ?troubled? at the end of June, up from 90 in the first quarter. Sheila C. Bair, the F.D.I.C. chairwoman, said Thursday that more failures are likely, although they would constitute only a handful of the nation?s 8,400 banks.
Many small and midsize banks do not have much exposure to the assets that are hardest to sell. ?The sludge is primarily in the structured products, exotic residential mortgages and commercial mortgage-backed securities,? said Gerard Cassidy, a banking analyst at RBC Capital Markets.
Those securities have tended to be held by big banks and Wall Street firms. Small and midsize banks, by contrast, have built up big positions of corporate and commercial real estate loans for which there is a market, albeit a depressed one. Unless the government offers higher prices, it is unclear how many of them would use the fund.
What the bailout might do, however, is relieve pressure on the government?s insurance fund, which guarantees deposits of up to $100,000 per account holder if a bank fails. As of the end of June, the F.D.I.C. fund stood at about $45.2 billion after suffering a nearly $9 billion loss from IndyMac Bank?s sudden collapse.
?It?s not exactly a panacea,? said Mr. MacDonald. ?For stronger banks, the plan will help them reduce risk, attract new capital or merger partners. For failing banks, it will help the F.D.I.C. resolve them at a lower cost to its deposit fund.? Instead, the Treasury Department coffers would directly absorb more of the losses.
Those concerns were reflected in the stock market Friday, where investors pushed down financial shares as conditions for banks continued to worsen. In addition to mortgage defaults, losses tied to auto loans, credit cards and commercial real estate are increasing along with unemployment. Analysts now project that several hundred banks could fail over the next three years, far more than the roughly 150 or so that they estimated this summer.
Smaller regional banks with troubled loan portfolios came under particular assault. Shares in National City, based in Cleveland, sank 25.7 percent to $3.71 even as the bank sought to assure investors that it remained well-capitalized and had not had an outflow of customer deposits, as Washington Mutual did.
Thomas A. Richlovsky, National City?s chief financial officer, said in an interview that investors had the impression his bank was a savings and loan institution regulated by the Office of Thrift Supervision, as Washington Mutual was. ?That is like saying Tina Fey is Sarah Palin,? he said. ?We are not a thrift, we are not a mortgage company, we are a bank. National City has no option-ARM mortgages on its books but is selling off a portfolio of troubled home equity, subprime mortgage and other bad loans.?
Downey Financial Corporation, a $13 billion savings and loan saddled with option-ARM mortgages, slid 48 percent to $2.03 Friday. Earlier this month, the Office of Thrift Supervision told Downey to provide a detailed plan to reduce its assets and strengthen management.
Shares in Morgan Stanley, which suspended merger talks with Wachovia last week after the investment bank changed into a bank holding company, also dropped 8.7 percent to $24.75, after investors began to doubt that the Mitsubishi UFJ Financial group of Japan would follow through on a commitment to pump around $8 billion in fresh capital into the bank.
In a memo to employees Friday, John J. Mack, Morgan Stanley?s chief executive, said that the Mitsubishi deal was moving ahead ?as anticipated? and that the two banks were exploring different ways in which they could collaborate.
Michael J. de la Merced contributed reporting.
***ok, can't get rid of all that funky text for some reason***
I heard about Wachovia, too, but from this website:
http://www.marketwatch.com/news/story/wachovia-shares-fall-after-wamu/story.aspx?guid={1F265D96-B8C0-4A9D-B2A2-1BEA35F146B0}&dist=msr_20
Even if it fails, you have absolutely nothing to worry about. All your money is federally insured, and if your mortgage is with them, nothing will change, except who you pay every month. The amount, interest rate, nothing will change.