Now That The Largest Bank Failure In U.S. History Is Over, Is Wachovia Next?

The collapse of Washington Mutual and the FDIC-engineered fire sale to JPMorgan Chase has people worried — about Wachovia. Wachovia’s stock is down 45% for the week, and 27% today as bailout talks stalled in Washington and WaMu held a garage sale at the FDIC.

Dow Jones reports that those of you waiting to hear more about those option-ARM, “pick-a-payment” or “pay-option” loans are going to be happy:

Wachovia, like WaMu, has a troubled mortgage portfolio and faces its own uncertain future. Saddled with a mountain of troubled adjustable-rate mortgages inherited through its 2006 takeover of Golden West Financial Corp., Wachovia has seen its financial condition weaken and its stock price plunge. Former Chairman and Chief Executive G. Kennedy Thompson was ousted earlier this year.

Both WaMu and Wachovia have taken big lumps from writing a mountain of so-called option-ARM loans, or adjustable-rate mortgages that allow some homeowners to actually increase their loans’ balance by paying less than the full monthly interest they owe.

Option-ARM loans have quickly become notorious for showing high rates of delinquencies and foreclosures. Many option-ARM borrowers have increased their loan balances even as the value of their homes fell, leading many to stop making payments or walk away from properties altogether as their homes were worth less than what they owed on the mortgages.

Wachovia recently held more than $120 billion in such loans, a central driver that has led the firm to raise capital and slash its dividend.

Not too long ago the CEO of JPMorgan Chase had this to say about the coming wave of Option-ARM loans: “The first wave of Americans to default on their home mortgages appears to be cresting, but a second, far larger one is quickly building.” He added that the losses on these mortgages, which were given to people with good or excellent credit, will be “terrible.”

Wachovia shares sink, down 45% for week [Chicago Tribune]
(Photo: epicharmus )

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  1. HowardRoarkLaughed says:

    My great-great grandfather was a co-founder of Wachovia. A shame that it’s been turned into such a shit-show.

  2. sir_eccles says:

    Hey let’s all withdraw our money from Wachovia today and make sure it is next huh?

    • Trick says:

      @sir_eccles:

      No way! Leave your money there. Sure it is FDIC insured. All you will have to is stand in line forever, fill out a bunch of paperwork to prove it is your money, beg and plead and walla, you get your money in six to eight weeks.

      Of course that is assuming that congress just doesn’t take it and give it to Wall Street first since Wall Street knows what is best for you.

      • VotaIdiota says:

        @Trick: What are you talking about? Six to eight weeks?

        Newsflash: All those people standing in line in front of IndyMac freaking out? If they had under 100 grand in there, THEY HAD NO REASON TO BE STANDING IN LINE.

    • jamar0303 says:

      @sir_eccles: Someone sounds a bit bitter today (or maybe that’s satcasm).

      • sir_eccles says:

        @jamar0303: Sarcasm I guess.

        Basic fact – no bank whether financially stable or not has the liquidity to survive a run of depositors withdrawing their funds.

        These articles serve to do nothing more than drive speculation on the stock markets and create panic.

    • jurisenpai says:

      @sir_eccles: I’m guilty – I just moved some money into my HSBC account. It’s not rock solid either, but at least I can earn some interest in the short term.

    • Inglix_the_Mad says:

      @sir_eccles: Depends I guess, on your immediate need for money. I don’t have an immediate need. Then again, this is why I bank at a responsible credit union.

      Asking people to treat bankers like Mr. Bailey from “It’s a Wonderful Life” would probably go further if banks weren’t willing to f*ck their own customers in the a$$ at any moment for a little profit.

      I don’t advocate yanking out money, because yeah, it is insured. However, if you have immediate needs to take care of (bills, vacation plans, whatnot) then I suggest drawing your account in advance for those.

      • @Inglix_the_Mad: You make a good point. In “It’s a Wonderful Life”, he took his entire savings to make sure the bank stayed afloat. No banker nowadays would do something like that to ensure that every one of their CUSTOMERS were taken care of, so why should we, as the customers that are getting constantly fucked, give 2 shits about them?

  3. APFPilot says:

    My investments are handled at Wachovia’s brokerage. It’s all in mutual funds and stocks, I should be covered right?

    • Anonymous says:

      @APFPilot: Is it a 401k account? If it is, it is held in a trust (per legal requirements) and is therefore safe even if Wachovia goes down.

    • meechybee says:

      @APFPilot: As long as it’s not over $100k. Otherwise, you get fifty-cents on the dollar for any amount over $100k.

      In any case, I would check. SOm investment vehicles are not FDIC covered at all.

      • EarlNowak says:

        @meechybee:

        Don’t scare people with that! Brokerage accounts and investment vehicles are not FDIC eligible, but any securities held by Wachovia brokerage are insured in case of failure by SIPC up to $500,000 per customer.

        This is true of almost all brokerages (Wells Fargo, Fidelity, Schwab, etc.) The insurance doesn’t cover you for paper losses (If you buy a stock and its value goes down), but definitely covers you in case your brokerage goes under. More information here.

    • Ass_Cobra says:

      @APFPilot:

      Don’t assume that. Their brokerage accounts should be legally separate and therefore not part of the estate of Wachovia should they go bankrupt. However the fact that you are asking this question leads me to believe you don’t have the slightest about your situation so you should firm these facts up by speaking wtih your financial planner or the apropriate rep at Wachovia.

    • mrgenius says:

      @APFPilot: The Glass-Steagall Act requires broker-dealers to keep client securities seperate from their assets. Brokerage accounts are insured by SIPC. It doesn’t protect the assets against market price changes, but it is there to protect the ownership of the securities itself.

      As a practical matter, if Wachovia Securities were to fail, then the SIPC will insure that the securities are either returned to the owner or transferred to another solvent broker-dealer. SIPC insurance is really only insurance to cover against malfeasance.

      For instance, if Wachovia failed and some employee stole your stock certificates or your securities otherwise went missing, the SIPC would replace them.

      That said, I think Wachovia Securities is a super-shitty investment firm and I’d move my accounts elsewhere anyhow.

  4. No wonder they tried so hard to have me roll-over my 401k into an IRA with them instead of my new 401k.

  5. B says:

    No guns, no smoking, seashells are ok? What’s the third symbol?

  6. Ihaveasmartpuppy says:

    Hmmm, our fixed rate, paid ahead mortgage is with Wachovia. Maybe it will get lost in the possible collapse? Yeah, right….

  7. Smitros says:

    666 Third Avenue?

    Wachovia is the Bank of the Beast.

  8. Joe White says:

    The mortgage, banking, and financial crisis is a lot like a infestation of locusts. They move to a field, devour it, and move to the next field. I took this analogy from Steve Liesman at CNBC and it is very accurate.

    Washington Mutual was devoured by the locusts overnight. This was because of their exposure in sub-prime and option arm mortgages coupled with a two week run on the bank by depositors.

    Wachovia has a very similar exposure to WAMU. They were huge in the option arm market and because of “mark to market” they are absolutely exposed. Anything that triggers a depositor panic will take them down. I would guess that in today’s market, that is almost inevitable.

    This is all senseless. They have very strong assets and it is totally because of the irrational “mark to market” requirement. At the same time, the entire landscape of finance, banking, and investment is changing over night. This is not good for the consumer. Our investment options are going to be greatly reduced. The stock markets are absolutely going to have to adjust stock values downward significantly to accommodate the lack of viable investment banking. Smaller companies are going to find it almost impossible to go public. Leveraged buy outs are no longer an option. I would expect over the next 12-18 months to see the real value of stocks to drop another 20-30%. This may not be evident in the indexes. This is because I believe the drop will actually take place in a devaluation of the US dollar. The dollar is worth about half what it was a decade ago and I anticipate it will continue to drop quite significantly.

    So here is what you will see on the stock market. The dollar will be dropping significantly and the stock market indexes will actually go up. In real value, we will take a major hit.

    In the mortgage world, options are simply going to go away. We are headed back to the 20% down with a 30-year fixed rate mortgage days. Rates will continue to buck the logic and remain relatively high as compared to other barometers like the 10-year.

    There will be tremendous consolidation in the banking industry. Local banks are in serious jeopardy. They may become a thing of the past.

    Real estate will appreciate significantly. Again, this won’t be real because of the shrinking dollar. I do believe real estate will be the most successful asset class. It almost has to be, given the economic climate.

    Where the real money will be made is in Non-Traditional Real Estate. The next two years are going to be an absolute gold mine for those of us practicing in this field.

    • @Joe White: If real estate continues to appreciate, how will anyone be able to afford it then?

      For 30 year 20% down to ever work again, real estate needs to come down in a hurry. I’m 22 and I really don’t see things going in my favor for quite some time.

      My fiance and I even make real good money…it’s just that living anywhere other than a townhouse or a condo is absolutely out of the question, and to even live in a townhouse or condo is expensive.

      You guys who already have houses may be unhappy if real estate has to come down, but you should suck it up…if it doesn’t, your kids aren’t ever going to be homeowners.

    • EarlNowak says:

      @Joe White:

      I don’t think local banks are in jeopardy at all. The local banks in my area (regional, state and truly local banks) have no exposure to subprime or Alt-A loans, because they’ve maintained high underwriting standards and don’t repackage them for the secondary markets. They weren’t making record profits in the last decade, but they have more than enough capital and performing loans to weather this storm.

      It’s the big banks that were taking chances to improve their bottom line that are in trouble. I think if anything, the draw-down in capital that national banks are undertaking to maintain liquidity will discourage the acquisition of local banks in the short-term- I doubt shareholders in local banks will accept any stock-for-stock transactions because of the instability in financial stocks right now.

    • kingmanic says:

      @Joe White: @RamV10: I don’t think they will appreciate very much, anytime soon. Right now prices are beyond the reach of almost everyone is almost every major market due to a speculative bubble. It’ll drop down past a more realistic then creep up. In areas where the speculation was light then we may see real estate appreciation but I highly doubt that real estate will appreciate in any major market for a long time.

      When a bottom is found to the mortgage crisis, then the real estate will hit bottom shortly after and it’ll creep up again. Until around that point buying real estate is not a good investment idea.

  9. deverbative says:

    I knew Wachovia was in trouble, my mom has her home loan with them and had to turn them into the Office of Thrift Supervision for trying to add a pre-payment penalty to her home loan.

  10. So now that I don’t have to pay WaMu my mortgage, do I still have to pay Wachovia for my husband’s car payment?

    Or can I save all that money and take a trip around the world? Cuz, yeah for me if I can!

  11. LeoSolaris says:

    Hmm I will have to watch out for the pre-payment penalty addition, if they try to do that to my new home. One of the reasons we went with Wachovia was because they did not have a pre-payment penalty.

    My fiancé and I recently moved to South Carolina, and went with Wachovia back in June, before all this crap hit the fan.

    Maybe it is time to slip out into the world of credit unions that have FDIC insurance… (I know there are a couple in Columbia, I recently looked them up.)

  12. Failsafe says:

    Okay – My regular checking account is with Wachovia. Does anyone have any advice as to what steps to take or how I should handle this?

    • MsCongeniality says:

      @Failsafe: That’s exactly what I want to know. I don’t keep much on deposit, but I’m going to need to deposit my paycheck and, you know, pay rent and bills out of it. Can you even still do that once a bank is taken over?

      • EarlNowak says:

        @MsCongeniality:

        Yes! Everything works the exact same if a bank is taken over by the FDIC or merged into another bank. Your ATM cards and checks and deposits, payroll direct deposits and billpay work just as they did last week, last month or last year. That’s the reason we have the FDIC backing all the banks in this country.

    • veronykah says:

      @Failsafe: As a WaMu customer, I went to their website last night and the only thing different was it said Welcome to JP Morgan Chase or something..debits, deposits, etc everything is the same.
      Got to WaMu.com and see for yourself…why does everyone freak out?
      I’m more worried that Chase is going to eventually change the terms of my free checking…

    • raskolnik says:

      @Failsafe: I wouldn’t. I’m a Wachovia customer too (keep a student checking account there and a CD that matures around June of ’09), and I think a depositer panic is the last thing we need. I think Wachovia can only weather the storm if people don’t freak out and ditch them in droves.

      That said, I may investigate the local credit union just to be safe :).

    • meske says:

      @Failsafe: I held my main accounts at Netbank some time back, which as I’m sure you know was seized by the FDIC about a year ago. All was transferred to ING. Very smooth transition. No disruption in service. No disruption in bill-pay. There was a cutoff date for these things, but it was reasonable and allowed me to move everything over to new accounts.

  13. Jimmy M says:

    Speculative articles lead to bank runs – and then pretty much seal their fate.

    Why do you run such articles, Consumerist? Why?

    • kingmanic says:

      @Jimmy M:

      Business models which depend on consumers not to do something – will find this will not hold true forever.

      Why do you use such business models, Banks? Why?

    • FMFats says:

      @Jimmy M: I work for a very small bank in the Atlanta metro area. Today just before closing a Wachovia depositor walked in with a brown bag containing $16,000 of cash he had just removed from the Wachovia down the street.

  14. Morac says:

    I have cash, monkey markets, mutual funds and stocks stored at Wachovia. The Mutual Funds and Stocks are not Wachovia funds/stocks. I know cash is FDIC insured, but what about the rest?

  15. mac-phisto says:

    i think wachovia’s fine. that is, until we see the fed’s relax the restriction on max deposits. if you see that amount lifted (currently $700 billion – coincidence?), expect wachovia, wells fargo & a string of other banks to be folded into JPM or BAC. guaranteed.

  16. anonymousanonymous says:

    I just called and found out some interesting information from my local Wachovia branch. If you have an account type of a Money Market Account, it is not insured in any way. If you have money in this type of account, you would lose all of your money in the chance of the bank going under.

    This is interesting because these types of bank accounts are commonly used as checking accounts for folks.

    It was also very interesting that I had a very hard time getting an answer to this question. The representative at the local branch was obviously reading a prepared statement detailing how strong the banks financial condition current is. I finally had to tell her that I do not care about the financial position of the bank but just wanted a straight answer to my question, would I lose all of my money if the bank went out of business in my particular accounts?

    • EarlNowak says:

      @anonymousanonymous:

      That is incorrect. A Money Market Deposit Account (MMDA) is considered a checking account for FDIC insurance, and is fully insured up to $100,000.

      A Money Market Mutual Fund (MMMF) is not FDIC insured, but you can’t get a MMMF through a bank, only through a brokerage service- and you buy shares in it, like any other mutual fund.

      More information here: [www.fdic.gov]

      Note that Money Market Deposit Accounts are in the “FDIC Insured” category.

    • Nytmare says:

      @anonymousanonymous: According to the Wachovia and FDIC web sites, money market accounts are insured alongside checking and savings.

    • WachoviaEmployee says:

      Misinformed employees. High Performance Money Market account is a “Savings” account type, although it is structured like a checking account to allow checks. But it is subject to Regulation D transaction limits, making it an FDIC insured savings product.

  17. Hoodooz says:

    We’ll be spending more than $700B shoring up the FDIC at this rate. The FDIC has NO real funds at this point.

    Did you think the FDIC took those bank insurance fee’s and saved for a rainy day? Uh, uh. The government spent that as fast as it came in. So now the Fed is busy printing money at an incredible rate while hoping China’s pockets don’t run dry.

    But now China has already begun restraining lending to the U.S. and the crap is about to really hit the fan. You folks who figured it wasn’t your problem are about to see why Warren Buffett is right yet again. I didn’t want him to be right on this, I hate the notion of bailing out the crooks on Wall street too, but it’s too late now. This is a rock and a hard place moment if there ever was one.

    • EarlNowak says:

      @Hoodooz:

      Well, for better or worse the FDIC has broad discretionary borrowing authority, including a line of credit at the Fed, the US treasury, and congressional authority to issue Bonds that are tax-free at the state and federal level. So the FDIC can handle it’s own balance sheet and raise premiums on deposits in the future to pay off FDIC debt. FDIC debt is backed by the full faith and credit of the United States and is basically considered as solid as a T-Bill by the world markets.

      What does this mean? Well, deposit rates will probably fall in the medium term, as banks have to pay higher premiums to the FDIC. And we might see fewer “Free Checking” account offers from banks. But the FDIC isn’t going to need a full-scale bailout unless the entire country falls into anarchy- and at that point, I’m putting my money into an H&B fund.

  18. anonymousanonymous says:

    Actually, the Wachovia account I am talking about is a HP MMA, or a High Performance Money Market Account. According to Wachovia employees at the local branch, this type of account is NOT FDIC insured.

    I also read the same thing as you did after posting my last comment.

    My particular type of account may differ from the ones referenced on the FDIC website. My apologies for not being more clear with my previous comment.

  19. techstar25 says:

    Well, now that you’ve published this article, they are sure to fall victim to the “Consumerist Curse”.
    Way to go!

  20. TheFuzz53 says:

    Wachovia has that $120 bn in option ARMs valued on their books for 95 cents on the dollar. An option ARM borrower with 720 credit score and 50% LTV is currently trading for 50 cents on the dollar.

    So $120bn cut in half = $60 bn writedown > $30bn company market cap.

    Yeah, I’d say they’re done.

  21. Hoodooz says:

    The government is roughly $9 trillion dollars in debt at this point and the “broad discretionary borrowing authority” is now window-dressing unless we can get other countries to shore us up with more and more fresh loans – which they’re becoming less inclined to do.

    The Fed will have to start printing money at an alarming rate (it has no other option), and serious devaluation of the dollar will be the result. Today that trip to the grocery store that costs maybe $100; will turn into $500 very quickly.

    Oh, and as of today – the FDIC has pretty much gone through its reserves. Your comment is a mirror image of the FDIC rebuttal to Bloomburg’s suggestion that the FDIC itself will require a bailout ([www.fdic.gov]) – but the logic (we constantly bring in fresh revenue/we can borrow from the Fed) is skewed: Fewer banks = fewer insurance payments received, and the remaining banks are far to pressured to cough up higher and higher fees, plus, where is the Fed going to get the money to loan the FDIC?.

    Sorry, it’s sad but the facts seem pretty plain once you’ve followed the logic around the circle a few times.

  22. Sorry, Consumerist–but by running articles like this you are contributing to the problem. I’m not sure how much of an impact you can have overall, though. It is scary to think we might be placed in a scenario where the media is always guessing ‘Who’s next?’, each time driving people to remove deposits from the chosen mark.

    I think that has already started.

  23. Josh_G says:

    If all the banks do go under and inflation goes up, blah, blah, blah, blah

    You money wouldn’t be worth anything if you do take it out if things get that bad, so what can you do? Just leave it in the damn bank.

  24. chauncy that billups says:

    Does it make sense to remove basic checking and savings deposits and place them in a better bank, say the SECU or BB&T? If only to stop from having to wait for accounts to become unlocked after a failure?

    • EarlNowak says:

      @bilups:

      Where does the idea of account locking after a failure come from?

      Every bank failure that’s happened in this country since 1933, depositors have gotten access to their accounts by the next business day. In extremely rare cases when the FDIC hasn’t found a buyer for the insolvent bank, every depositor has gotten a check for the full insured value of their account within two business days. There’s no reason to panic or switch your accounts over to a new bank, unless you want to be part of the run on the bank..

      • chauncy that billups says:

        @EarlNowak: Ok. I guess I was thinking of IndyMac – but I think that people were just stuck over the weekend – I assume they could get into their accounts monday? I wonder what the chances are that Wachovia will get bought? They seem to have a pretty strong position on the whole.

  25. Geblah187 says:

    NOES MY WACHOVIA! :(

    Seriously, I’ve never banked anywhere where you always get someone who speaks English on the phone … and they have always been very helpful.

    I suppose this is karma for me laughing at my wife and her WaMu account … I’m not feeling the woo-hoo either.

  26. straightgawker says:

    Mark to market is not a ridiculous requirement. On the contrary, it would’ve exposed the current problems a year ago. Held to maturity is what’s ridiculous – allowing banks and insurance companies to keep worthless securities on their books at the price they paid for them.

    Like someone else said, most local banks will not have immediate problems. They generally make more loans to small businesses in their area than they take in in deposits. This means they have no need to go out and buy structured securities. Then again, they’ll have no problems until the small businesses in their area start having problems due to the economy going the hell.

    After the national banks, it’ll be the regional banks that start getting taken over by the government. Also, we’ll start seeing more insurance companies go down if nothing’s done.

    • stevejust says:

      @straightgawker: Too bad what you said here about local banks not having a problem and what’s actually happening is… well… absolutely wrong. Most FDIC takeovers have been regionals so far:

  27. UnnBabble says:

    The fact that branch staff do not know what accounts are and are not FDIC insure, such as the HP MMA, is scary enough.

    It’s a great day for BB&T, though.
    http://www.bizjournals.com/baltimore/stories/2008/09/22/daily42.html

  28. ShwetaBanks says:

    I just snapped this at a Wachovia branch in Chatsworth, CA.

  29. VerdaTiberius says:

    Regarding Wachovia’s High Perormance Money Market Account:
    http://www.wachovia.com/savings/money-market.html

    “Enjoy peace of mind with maximum FDIC insurance.”

    Please get your facts straight before posting and worrying people unnecessarily.

    Futhermore:
    http://www.fdic.gov/consumers/consumer/information/fdiciorn.html

    “What Is Insured?
    You are probably familiar with the traditional types of bank accounts – checking, savings, trust, certificates of deposit (CDs), and IRA retirement accounts – that are insured by the FDIC. Banks also may offer what is called a money market deposit account, which earns interest at a rate set by the bank and usually limits the customer to a certain number of transactions within a stated time period. All of these types of accounts generally are insured by the FDIC up to the legal limit of $100,000″

  30. VaniaNermin says:

    A Wachovia High Performance Money Market account is an interest-earning savings account with limited withdrawal transactions that is insured by the FDIC. A money market mutual fund is an investment account that may hold a collection of cash and securities that is not protected by FDIC insurance.

    Your local branch employee was wrong.

  31. On a good note this mess will slow down illegal immigration. If you come from a country that has a huge gap between the rich and the poor, an executive branch that ignores the constitution, rising unemployment and a currency that’s practically worthless, you won’t find much difference in the U.S.

    • urabl says:

      @postnocomments: I had the same exact thought this morning, and not jokingly either. The flipside being, how long until highly-educated Americans start moving to Europe?

      • azntg says:

        @urabl: Is Europe still the only center of the world?

        There’s a whole bunch of other continents out there. My bets are that the highly-educated Americans might actually move to South America and Asia. Lot of them are still developing and some money to be earned over there too.

  32. WachoviaEmployee says:

    @anonymousanonymous: Yep, wrong employees. Call 800-WACHOVIA. They may be stupid, but not quite as stupid as the branch employees.

  33. SpyMagician says:
  34. Midwest_Product says:

    Wachovia will fail, but it is very unlikely to be next. Downey and National City are definitely in the line ahead of them for the race to failure.

  35. Invective says:

    I always tape and watch C-Span, gavel to gavel coverage in times like these. You watch the news and they rewrite history, which I’m not really interested in.
    I saw some things over the past two weeks. First was the Republicans made a consorted effort to make sure the point was made that ‘we don’t need to blame anyone now’. Additionally as the weeks, months and 3 years from 2005 has moved on, Lindsey Graham’s hair is in 2nd place only to the U.S. President. (Mine would be too if it were me that attached the document that started this whole mess with banks betting off the books.) So Republicans have now begun a campaign to blame everyone and anyone. Democrats don’t usually actually read the bills, so they probably still don’t know what’s hit them. The bailout is diversion and a cash cow.
    What’s next… Insurance companies, States and probably even Social Security itself. Should congress decide to actually do the deed, then you can expect *nothing* in the way of real progress in America for a long time to come.
    Now, if Oil decides to end the great oil drilling campaign, [en.wikipedia.org]
    and they reduce gas prices significantly, then we have a chance. Oil is still comparing the U.S. price of gas to Europe and co. which is like comparing apples to peanuts, since we use more of the stuff, we should get a bigger discount. Of course that doesn’t make Exxon very happy, so they’ll keep pushing their agenda until the cows drop dead before actually getting home…
    Meanwhile Exxon and company is *killing* America in a false and hidden market. Much like the bank betting that’s melting down now.
    By the way, if you’re a bank and if you bet off the books, then you lost, game over. Someone besides me needs to say that. If we go to Vegas, we bet our entire wad and lose, nobody comes and rescues us. It isn’t the banking problems that are bringing down America, it’s oil and gas. Banking has just added to it.
    You all continue arguing over Republican Vs. Democrat and you’ll never get the points. (Except the talking points of course, those Americans get in abundance.) Both political parties are corrupt. Americans expect it, so it’s what Americans get, meanwhile the Power and Oil industries enjoy a monopoly in a false market, just like the banks did. Demand more from your government, ask for heads to roll, no matter who the political party and America might yet still have a chance. Do it not and you better start learning how to eat Chinese. I mean the real Chinese food, where little Jeffry goes and picks out ‘Fluffy’ for dinner and cockroaches are the appetizer…

  36. ZukeZuke says:

    @ Consumerist – trying to start a run on Wachovia now?

    • azntg says:

      @ZukeZuke: Would you be posting the flip side comment if Consumerist fails to report anything and Wachovia hits the gutter too?

      I believe the Consumerist reports to the readers everything relevant that can affect them (most of the time). Whether people go on a bank run or not, is the respective people’s business.

    • StoneKitten says:

      @ZukeZuke: @ZukeZuke:

      @RomeoCache:

      I know, right ? LOL I wish !
      I bandy about consumerist.com as a threat to crap CSR people and they NEVER seem familiar with it (my friends say Comcastic IS very aware of consumerist though)

  37. allstarecho says:

    My car loan is with Wachovia Dealer Services, which I assume is owned by Wachovia Bank. This will be interesting.

  38. RomeoCache says:

    It makes me laugh that you guys think that this website could be blamed for causing a run on Wachovia. It’s a popular site, but not quite that popular! The fact of the matter is that the Wachovia stock has been dropping like a rock for the past year. It’s down about 80% from a year ago. The same thing happened to ever other bank that failed. Ignoring a problem does not make it go away. If you have more than $100K at Wachovia, then move it or lose it. There is a real chance that Wachovia could fail. It just doesn’t make sense to risk what may be a life’s saving as a show of trust in the future of a bank.

    Really, the FDIC should just raise the insurance limits on individual accounts. $100,000 is not quite what it used to be. Didn’t they choose that amount back in the thirties? They should raise it to a million if they want people to keep their money in the bank. Not that I have that much (maybe someday!), but I have been lucky enough to have saved more than $100K and you just can’t leave it all in an account at risk. I pulled out the extra back in July.

    • StoneKitten says:

      @RomeoCache: @ZukeZuke:

      No but I am forwarding this story to over 450 personal contacts :-)

    • Rectilinear Propagation says:

      “It makes me laugh that you guys think that this website could be blamed for causing a run on Wachovia. It’s a popular site, but not quite that popular!”

      @RomeoCache: Furthermore, I don’t think people who read Consumerist regularly are going to panic. Just look at the comments. At worst there are people asking what they should do since they have certain accounts with Wachovia and even those are calm (and are followed by equally calm replies).

      Nobody has said to yank all of your money out. Nobody is freaking. They just had an article up saying that WaMu customers can bank the same way they always did. If anyone can post a ‘Is So-and-So Next?’ story without causing a panic it’s Consumerist.

  39. StoneKitten says:

    I’m about to sue them for several federal level violations.
    Ah the story I have to tell.

  40. jedthehumanoid says:

    As a Wachovia employee I actually registered simply to be able to comment on this one thread. While I’m a little disturbed by the complete ignorance many people display in their comments towards banking regulations, those who have stated the biggest danger to Wachovia is a bank run are quite correct. The bank is solid on in most respects, and given enough time will eventually overcome the leaden weight that is the old World Savings Pick-a-Pay portfolio. The worry is that it won’t.

  41. thinkfreemind says:

    Just a question because I don’t know… What happens to a loan (like my vehicle loan) if a bank shuts down or is bought? Is it still business as usual just to someone else..?