The Guardian (04.14.08):
"America's fourth largest bank, Wachovia, is raising $7bn (£3.52bn) through emergency fundraising as the subprime mortgage crisis in the US continues to reverberate through the banking sector. Wachovia is raising the funds through public offerings of common and convertible preference stock after incurring a surprise $350m loss in the first quarter of 2008 compared with $2.3bn in profit a year earlier." Fourth Largest US Bank Resorts To Emergency FundraisingA surprise loss of a third of a billion dollars? Whoopsie!! Not my fault. "Wachovia's chief executive, Ken Thompson, blamed the 'precipitous decline in housing market conditions and unprecedented changes in consumer behaviour' for the figures. The group bought Golden West Financial Corp, a specialist in these adjustable rate mortgages, just before the home loan market plunged." Otherwise it wouldn't have been one of the worst deals in the history of banking. The Australian (04.14.08):
"Wachovia's current problems stem largely from its $25.5 billion purchase of Golden West nearly two years ago. The bank’s executives initially trumpeted the deal as an ideal way to grab a foothold in California, where Golden West was based. Wachovia To Get $8bn Capital Infusion"While the heart of Golden West's business was non-traditional mortgages, Mr Thompson assured jittery investors that its tough underwriting standards and decades of experience meant that the company was well positioned to weather an anticipated slowdown in housing markets." Then again.