Wachovia posts loss, panhandles for $7 Billion

Faithful Naybobs know that Wachovia is part of our dead pool watch list,

under WWW for warnings on WaMu, Wachovia and Wells Fargo.

We constantly hear from executive management how "well" these banks and lenders are doing,

only to be "surprised" at reporting time, much to the chagrin and expense of the minority of shareholders who are not short on these losers...

Today, Wachovia posted an "unexpected" Q1 loss as credit problems from mortgages and other debt soared,

prompting the 4th largest U.S. bank to raise $7 billion of capital, slash its dividend 41% and cut 500 jobs.

The bank sold shares at a discount after boosting its reserves for credit losses 16X ($2.83 billion for credit losses) and writing off $1.56 billion of debt.

ROI went from +13.5% to -2.1% as Wachovia's Q1 net loss was $350 million and its 1st since 2001, revenue fell 5% as profit in consumer and business banking...

Wachovia's largest unit, fell 17% while nonperforming assets more than quadrupled to $8.37 billion.

Being in desperate straights for CASH reserves, Wachovia sold $3.5 billion of discounted (14%) common stock at $24 per share.

It also sold $3.5 billion of preferred shares with a 7.5% dividend and convertible into stock at a 30% premium.

The latest CEO caught "asleep" at the wheel, CEO Kennedy Thompson's lip service...

was just as lame as the rest of Wall Streets "best and brightest" whose hubris and greed have brought us to this point:

"I'm deeply disappointed with our Q1 results. The precipitous decline in housing market conditions and unprecedented changes in consumer behavior...

These actions are not without cost and I wish they were not necessary, but they are. We think it's the conservative course.

The most painful decision was to reduce the dividend because it adversely affects our shareholders
."

Wachovia ended March with $783.6 billion of assets. Through Friday, its stock was down 27% in 2008 and 50% since its peak in 2006.

The Nattering One muses... US Bancorp, JPMorgan Chase, Wells Fargo, Merrill Lynch and Citigroup also report this week.

Gee, I wonder if anything "unexpected" or "surprising" might be on tap.

Ol' Kenny wants to blame "unprecedented changes in consumer behavior".

As far as "adversely affecting our shareholders", don't ya think with a 50% valuation loss

that perhaps the first "action not without cost" might be CEO Thompson and his executive teams resignation?

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