Tuesday, July 22, 2008

Even large banks like Wachovia are suffering…

According to the Washington Post article: Wachovia Loses $8.9 Billion in Second Quarter :

Wachovia Corp. lost a staggering $8.9 billion in the second quarter of this year, leading the nation's fourth-largest bank to cut its dividend and slash 6,350 jobs in response to mortgage-related losses.

Wachovia is being hurt by its $25 billion acquisition of California's
Golden West Financial Corp. in 2006, a California lender known for novelty mortgages that are now defaulting at a higher rate than more traditional mortgages.

Shares of Charlotte-based Wachovia dropped at the market's opening today but rose in mid-morning trading. The market as a whole mirrored Wachovia, diving at the opening bell on earnings from
American Express Inc., Apple Inc. and Texas Instruments Inc., all of which failed to meet analyst expectations. "

Now large banks like Wachovia are suffering? I sure hope our next president is prepared to deal with these economic issues…
Image: Washington Post (Chuck Burton - AP)