Billion, Wachovia did walk too close to the edge, and was sold on the cheap for spare parts. However Wachovia was picked off, others worse were left standing. NC legislators did not pull any rank in this, and left many shareholders in the lurch. That would include Elizabeth Dole, who was asleep at the switch. Wachovia was not the worst offender during this time frame, that prize goes to others larger like Citi, who was a walking dead zombie, and Prince Alaweed somehow managed to pull more influence to protect his investment than US citizens who were left in the lurch with Wachovia being sold for spare parts. This was despicable.
I do recognize that the black hole of losses which would have been left if there had been a massive run on Citi, globally, would have created financial armageddon. A run on Citi, globally, was the doomsday scenario.
Still this con has not been fair to those in the southeast US, long term stockowners of Wachovia, and employees. IIRC there was even a danger to the Wachovia pension during the negotiation between Citi and Wells Fargo. That was clear from the first deal Citi put on the table where they were only buying some parts and trying to escape dealing with the pension owed to people. That is also dispicable. We have a lot of complaints about how this midnight scam was pulled off, the theft of Wachovia, and we are justified. It is one for the books.
yes, it was a stunning fall. No one, including myself though that would happen, for the reason of the storied history,great importance to the region in jobs, lending relationships, and giving back to the community, as well as for the reason that it was so obviously a picking off directed by a federal cabal which had no respect for banking anywhere but NYC, if even there.
It is interesting to revisit all of those lows in hindsight, and how frightening all of that was, especially with Hank Paulson and his agenda to crush some banks to give to others, back in 2008-forward.
We did not need to have all of those banks crushed, imo, it just panicked the system. Of course hindsight is 20/20, but in hindsight the small detail of guaranteeing the money market funds before primary reserve broke the buck would have been the difference between day and night for 2008-2011. A lot of misery would have been prevented.
HP was a bull in a china shop.
yes wasn't that something. All the while he was running amuck and crashing financial institutions. Now residential prices are back higher than they were then. Which should give him something to think about.
It appears that all of the non-performer mortgages could have been extracted from these banks and set up in trust to work out over 5 years which would not have cratered the market in 2008-2010. . Like RTC. It was not the system's fault that some of these loans had bad underpinnings when all were foreclosed at once. The system created the panic..
Quite frankly if the collateral had held value on resale there would have been no problem.
It was only en masse foreclosures that the problem was created, So this should have definitely been handled differently, with that TARP being used to offload these mortgages into a special trust for workout. Not leaving each bank to crush the market with this stuff all at the same time.
Financial stock prospects are an interesting topic as new technology comes about such as the secure payments via iphone. These could be some disruption to traditional banking products which, might re shape the industry.