Things I Should Have Blogged At The Time

Posted on September 29, 2008

On Friday night I considered making the following prediction:

By 9AM on Monday, September 29, my bank, Wachovia, will have become the next bank to fail.

… based on stories like this one that emerged late last week about Wachovia frantically looking for someone to buy them the way JP Morgan Chase bought Washington Mutual.

(As you can imagine, since I have pretty much every penny I’ve ever earned in accounts at Wachovia, I have been reading stories like those quite closely.)

Sure enough, I turn on the computer this morning and find that I was right:

Citigroup Inc. will acquire the banking operations of Wachovia Corp., one of the nation’s largest banks, in a deal facilitated by the Federal Deposit Insurance Corp.

Citigroup will absorb up to $42 billion of losses in the deal, with the FDIC covering any remaining losses, the government agency said Monday. Citigroup also will grant the FDIC $12 billion in preferred stock and warrants.

… but I get no points for foresight on this one since I was too lazy to actually sit down and blog the prediction. Shoot.

At least it looks like my money is safe; I guess I’ll just have to be content with that!

UPDATE (Noon): Buried in its coverage, the Washington Post explains what took Wachovia down:

The company bought its troubles in 2006 with the $25 billion acquisition of Golden West Financial, a major mortgage lender based in California. Golden West specialized in “option” mortgage loans, which allow customers to pay less than the maximum each month, as on a credit card.

(Emphasis mine)

How could anyone have foreseen that ending badly? Jeez Louise. That’s such a bad business decision, I’m just in awe.