Cramer on BloggingStocks: The bell tolls for Wachovia

Posted May 20th 2008 9:20AM by Jim Cramer
Filed under: Market Matters, Citigroup Inc. (C), Wachovia Corp (WB), Cramer on BloggingStocks

TheStreet.com's Jim Cramer says this once conservative bank wrote its own obituary in deals that undermined its roots.

Remember when Wachovia (NYSE: WB) (Cramer's Take) was a respected, conservative institution? When it was a classic good regional bank that could always be counted on to deliver the numbers and be good to its clients and shareholders?

What is this Wachovia? Where did this Wachovia come from?

How could Wachovia lose $1 billion of its entrusted funds in a highly levered Citigroup (NYSE: C) (Cramer's Take) hedge fund called Falcon? How did it allow itself to be lulled into this kind of madness?

Or California. How did Wachovia get beaten over the head so badly in this Golden West transaction? Did it just take the Sandlers' -- the old owners -- words for it that the loans were good? Did the company do any due diligence about the Golden West pick-a-way-to-pay plan, where the borrowers basically could get a free ride in a house if it went up in value but Golden West, and now Wachovia, bought the downside? How did it let a "heads you win, tails I lose" situation develop?

I sit here and look at this once great franchise and I wonder whether:

A) They had just lost its mind and the people running it had no idea what they were doing, or

B) They decided they wanted a lot of risk and betrayed their roots.

Either way, it is the obituary for the Wachovia as we knew it, and a recipe for a stock that simply can't be owned even if there is a turn unless this management vanishes from the face of the banking earth.

Sad. Really sad.

Great legacy lost.

RELATED LINKS:
Wachovia: Auction Rate Securities Probed
WaMu COO: We're Not Done Hemorrhaging

Jim Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. At the time of publication, Cramer had no positions in the stocks mentioned.

Tags: c, citigroup, featured, jim cramer, JimCramer, wachovia, wb

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Reader Comments (Page 1 of 1)

5-20-2008 @ 12:34PM

markaryang said...

These lousy comments didn’t secure new job in banking world for you so far, and I hope wouldn’t. Dogs bark, but the caravan is goes on

5-21-2008 @ 12:55PM

Chuck said...

Sign me up or let me know when a class action suit is filed against this busted company. I got involved with the Wachova stock when A. G. Edwards sold out to this terrible company. Doesn't speak to well for the management at AGE to get involved with a sub-prime company.