Welcome to Great Wall Street Flea Market
Wake up and good morning. There once was a bank that had trouble ... too much lending it had done in a bubble. Still two days to go in this extraordinary week of Wall Street's game of Ultimate Musical Chairs. Who gets gobbled up or rescued today?
Let's start with a Bloomberg report that U.S. S&L giant Washington Mutual, or WaMu, (having hired Goldman Sachs to begin an auction) is being eyed for some of its choice parts by the likes of JPMorgan Chase, Citigroup, Bank of America (don't they have enough on their plate?) and Wells Fargo.
And what of Wachovia Corp.? Morgan Stanley CEO John Mack got a call from Wachovia on Wednesday to at least explore a merger. Yet the New York Times reports, citing unnamed sources, Mack made an unsuccessful effort Tuesday to persuade Citigroup CEO Vikram S. Pandit to enter into a combination. “We need a merger partner or we’re not going to make it,” the newspaper said Mack told Pandit. Not that Citigroup's track record lately has put it in much of a position of leadership in these tough times. You can only put so much lipstick on a lousy balance sheet.
"Given the financial conditions today I feel like a kid in a candy store," beamed Wells Fargo Chairman Richard Kovacevich. "There is a lot out there today. ... Wells Fargo often buys fixer uppers," he said in a speech Wednesday.
Wow. We're in the equivalent of the Great Wall Street Flea Market. Lenders with any muscle left are are scouting for bargain-basement assets to acquire thanks to stock-market declines that have wiped out more than $1-trillion in market value from U.S. companies. A lot of the bad debts out there will be inherited by us, U.S. taxpayers, courtesy of federal bailouts. Here's my look at the rising calls for a new Resolution Trust Corp., a must-have to get things fixed.
Okay. Clear the decks. There are other notable things happening in Tampa Bay! How about those Tampa Bay Rays? If this was a business story, we'd be hooting about the biggest corporate turnaround in recent history here. I'm positive it has little to do with so many owner/managers with experience at Goldman Sachs. Check out St. Pete Times sport columnist Gary Shelton's take on Rays manager Joe Maddon's management style.
So who's minding all those folks lending mortgage money in Florida? Apparently no one. A Miami Herald investigation this summer found breakdowns in the state enforcement system, including the licensing of thousands of criminals, including money launderers, racketeers and cocaine traffickers. In a followup this week, a new report says Florida investigators says state regulators failed to alert police agencies to crooked mortgage brokerages, ignored citizen complaints and allowed hundreds of people with criminal histories to peddle loans. The report criticized the Office of Financial Regulation, saying the agency broke down in key areas, including screening brokers and shutting down shoddy operations, while the state grappled with the nation's worst home loan fraud crisis. Come on, people. We can do better than this.
-- Robert Trigaux, Times Business Columnist