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Real Estate Lending Growth, 2003-2008

by: Paul Kedrosky October 02, 2008 | about stocks: BAC / C / JPM / WB / WFC    
Paul Kedrosky

Paul Kedrosky

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Nice Bloomberg chart of growth in U.S. real estate lending among major U.S. banks. You get a pretty clear idea of how badly timed Wachovia's buy of lender Golden West turned out to be, and how big of an inflection point the event was in Wachovia's declining fortunes.

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This article has 5 comments:

  •  
    Oct 02 12:52 PM
    in regards to Wachovia Wachovia got rid off the prior toxic risky wasted bank subsidiaries and kept the good ones. Now it can start from scratch to build a new banking subsidiary with safe practice together with its remaining good outstanding subsidiaries. The current subsidiaries of Wachovia make it look like “Merrill Lynch without the toxic risky waste”, good job from management it separated the good bank from the bad bank overnight, plus its CEO Bob Steel is one of the top rated mutual fund managers. Wachovia will keep the valuable human resources and the talent that have expirience in the banking business saving them for the new banking subsidiary. Buying the municipal bonds or the auction rate securities will give the inflow of cash as long as its hold even to maturity. Some investors are taking money away from Hedge Funds going wild and putting that money into accounts manage by people that know what they are doing, Bob Steel is one of those people that know what they are doing, dont be surprise some of this money will go to Wachovia subsidiaries. Earnings will be adjusted accordingly, like simple arithmetics they will manage its expenses vs its earnings to come ahead in capital and start piling up cash (saving cash a hard job for most of us that live on debt), this new cash will give them the jump start of a new banking subsidiary without even thinking about to sell its remaining subsidiaries.Forgot to mention that Wachovia owns a hudge Insurance subsidiary which is making money and has sound book of business. Lehman debt is bonds most of them senior, as bankrupt as Lehman is those bonds get paid. ARS are Municipal Bonds as bonds they get paid, hold into maturity they get paid in principal, those ARS are cash flow. Preferred dividends will get paid accordingly because the holding company does not own the banking subsidiaries anymore so modification are going to be made. Getting rid off the toxic waste risky bank related subsidiaries is a good strategy and converting the remaining broker one to a new bank subsidiary with clean sheets is a good one too.
    Reply
  •  
    Oct 02 01:02 PM
    Ishortyou, we've all read your pump 10 times by now.

    Interestingly to me, the chart shows that lending hasn't really dropped off, just stopped going up.
    Reply
  •  
    Oct 02 03:36 PM
    This IShortyou 'investor' seems to be hurting much from the Wachovia stock collapse.... I have seen this exact same post cut-pasted on dozens of websites, forums and discussion boards. Its almost like he is trying to spam his way back to profitability :) Its really funny... the desperation and denial that the game is almost over... and its not him that won. Pseudo-psychoanalysis: He probably also finds it VERY difficult to deal with losing in real life... and probably looks for everyone else to blame for his own failure.. hehehe
    Reply
  •  
    Oct 03 12:32 PM
    bad day for WB shorts!!!
    Reply
  •  
    Oct 03 07:58 PM
    Ishortyou-- before submitting your written opinions, take time off to enroll in a course that teaches you the fundamentals of punctuation, something you should have mastered before graduating from grade school...assuming you did.
    Reply
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