Wachovia, the fourth largest bank in the USA, has posted a quarterly loss, the first since 2001. The bank made an ill-timed $24.6 billion takeover of Golden West Financial Corp. in 2006, at the peak of the housing boom. Now things don't look so rosy. Andrew Seibert is a portfolio manager at NexTier Wealth Management in Pittsburgh, which oversees $400 million in assets. He has some pithy remarks to make. "They obviously didn't take a close enough look at Golden West. They made a mistake in buying Golden West. The driver of all this is summed up in one word - Greed. They saw the big dollars and they went for it.''What is it with current the crop of bank bosses? They appear to be doing exactly what they advise their customers NOT to do! Wow! David Hendler, an analyst at CreditSights Inc., went a stage better. He said, "Wachovia is now looking almost as bad as Washington Mutual on the mortgage side. This shows investors have to be more cautious and not take management's word for granted.'' That's telling us they can't be trusted.
Integrity out - greed in! Great banking motto, I must say. And all this talk of losses? Unless the bank is burning dollars in some dumpster at the back of the building, somebody else is benefiting from the cash. Nobody loses money unless they drop it in the street. It is a game of winners and losers. A sort of snakes and ladders for bankers!
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