Michelle Malkin » Open-borders Wachovia bank posts $8.9 billion loss

Open-borders Wachovia bank posts $8.9 billion loss

By Michelle Malkin • July 22, 2008 11:01 AM

Well now. It looks like banking on illegal immigration isn’t paying off for Wachovia. The bank’s massive losses and job cuts are the big news rocking the financial sector today:

Wachovia Corp., the U.S. bank that hired Treasury Undersecretary Robert Steel as chief executive officer two weeks ago, reported a record quarterly loss of $8.9 billion, slashed the dividend and announced 6,350 job cuts. The stock slumped as much as 10 percent in New York trading.

The second-quarter loss of $4.20 a share compared with net income of $2.3 billion, or $1.23, a year earlier, the Charlotte, North Carolina-based company said today in a statement. The loss included a $6.1 billion charge tied to declining asset values.

The writedown, job cuts and second dividend reduction in three months reflect Steel’s response to the worst housing market since the Great Depression, which cost former CEO Kennedy Thompson his job after eight years. Wachovia has dropped more than 75 percent since it spent $24 billion two years ago to buy Golden West Financial Corp. just as home prices were peaking.

“Steel is clearly trying to get his arms around this,” said Joseph Gordon, president of Gordon Asset Management in Durham, North Carolina, which owns Wachovia shares and manages more than $200 million. Even so, “We aren’t advising any clients to buy until they fess up and go full transparency on Golden West and their commercial lending problems.”

Wachovia shares have declined 65 percent this year, the second-worst performance on the 24-company KBW Bank Index behind National City Corp., Ohio’s largest bank. The stock fell $1.18, or 9 percent, to $12 at 9:55 a.m.

Perhaps if the company had spent more time making sound business decisions and less time pandering to the National Council of La Raza/The Race and chasing the open-borders market, it wouldn’t be in as deep a hole as it is today.

***

Related item: Who would benefit the most from the latest housing bailout proposal?

Subprime loans – loans made to homebuyers with less-than-perfect credit – were responsible for a large share of the foreclosures that started last year. And minorities received a hefty share of those loans. Just over half of African-Americans and 4 in 10 Hispanics who got a mortgage in 2006 had a subprime loan, according to a 2007 analysis by the Center for Responsible Lending.

Also, the areas hardest hit by home-loan crisis are heavily Hispanic. In seven of the 10 metro areas with the highest foreclosure rates last month, they represent at least one-third of the population; in two of them – Merced and Salinas-Monterey, Calif. – Hispanics make up more than half of the population. Their rates of home ownership are also high: More than half of Hispanic households owned their home in eight of the top 10 foreclosure cities, according to the latest census data.

African-Americans are also hit hard by the crisis, although they aren’t concentrated in cities with the highest foreclosures. In only two of the top 10 metro areas – Fort Lauderdale, Fla., and Vallejo-Fairfield, Calif. – did they make up more than 10 percent of the population. Their homeownership rates also trailed those of Hispanics in all but Vallejo-Fairfield.

Still, African-Americans made up more than 20 percent of the population in metro Detroit, No. 13 on the list of top foreclosure cities by RealtyTrac, and in Miami, No. 15.

It is cities such as these – along with Cleveland, which felt the brunt of the housing crisis early – where the pressure is building for local politicians to come up with a solution.

Activist groups say this racial dimension to the problem puts a special responsibility on the federal government to relieve distress in these neighborhoods.

Flashback: Open borders and the mortgage mess.

Posted in: Immigration, Subprime crisis

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#101

On July 22nd, 2008 at 6:08 pm, brad_sk said:

davidcaskey said: at 97
I bank at Bancorpsouth and I live in Louisiana….

You are right…French should have been an option in LA instead of Spanish and I don’t mind businesses giving ads in French to improve business atleast until English is officially made our primary language. But you at least you have Bobby Jindal as your governor:)
#102

On July 22nd, 2008 at 6:27 pm, a crapweasel said:

On July 22nd, 2008 at 4:58 pm, davidcaskey said:

I bank at Bancorpsouth and I live in Louisiana. Now Louisiana has long been French. What language options are available at he ATM? Spanish and English. When I call down to Baton Rouge to talk with my favorite politician, what language options are given in a state that wants to promote its French heritage? Spanish and English. The same goes for calling the Federal government. Does it sound unreasonable that a large number of us want to leave the Union again? Go to http://www.lsu-unofficial.com for other observations on my nutty state.

This is why I’m trying to learn all the Creole that I can.
#103

On July 22nd, 2008 at 6:31 pm, Boomer said:

I’m glad to see a little bad karma being handed out to the lending organizations that were in league with the illegal invaders. May their balance sheets continue to reflect their traitorous pandering and reckless business decisions to provide credit to those that have a long history of being poor risks.
#104

On July 22nd, 2008 at 7:03 pm, xler8bmw said:

#97 is that recent because of the influx of hispanics to rebuild NOLA?
#105

On July 22nd, 2008 at 8:02 pm, Helene said:

Wachovia is having problems for one simple reason; Lousy business decisions.

So Wachovia and it’s investors get to pay the price for poor business decisions. If I had investments in Wachovia, I would be outraged. The managers played loosey goosey with other peoples money. How nice, they were operating a charity instead of a business.

Poopy on them.
#106

On July 22nd, 2008 at 8:57 pm, Freddy said:

Seems like the only question left is will we be paying for housing for illegals, or will we be paying for housing for the ‘new amnesty’ immigrants?

I wonder how long till the two ‘top’ candidates we have will jump on the illegal alien handout bandwagon?
#108

On July 22nd, 2008 at 9:46 pm, Glamchild said:

One-bedroom, falling-down shed selling for 2-million dollars

+

Illegal Alien

+

Subprime mortage with no money down and no collateral

=

The great State of Crazyfornia !!!!
#109

On July 23rd, 2008 at 1:26 am, love2rumba said:

Heather Radish said:

A lot of people did, and a lot of innocent German-Americans were arrested, beaten, and lynched. Their homes and churches were destroyed and their newspapers were forced to close. Their children were forbidden to speak their language and millions of Americans lost their heritage.

My background is biologically partly German and I already have a bachelor degree in History with honors. I don’t think anything that titanic ever happened to Germans during that time unless you are lumping a WHOLE lot of isolated incidents of 200 years into one 30 year period, and frankly my adoptive parents who are really German would have told me about this now wouldn’t they? Hmmm?

What koolaid are you drinking?

If immigrants don’t assimilate then they cannot call themselves American.

By the way immigrant assimilation is not fascist it is a courtesy that immigrants (used to) extend in grattitude to their new homeland. I would expect myself to do the same for the people of a foreign country If I chose to, and was allowed to legally to relocate.

Please do not exaggerate, ok?
#111

On July 29th, 2008 at 10:21 pm, Pat said:

I notice WaMu has stopped with the double language deposit slips, after many complaints from people like me that the slip is unreadable, for one thing, and insulting too.

Bennigans hasn’t done so well going bilingual, either. (See http://www.debbieschlussel.com/)