Paul Bishop

New Year, Same Meltdown Mess

Not for publication, but I have an interest in Both World Savings and Wachovia, now Wells ( lots of liability, not much upside) I don't think Wells adequately assessed the risk inherent with Wachovia, there are some very serious class action lawsuits wending their way through the courts. All have very serious potential and most are going to pass the Summary judgement easily. While Lerach and Co. caused the bar to be raised, there will be some serious Security class action suits, all will have merit, this liability is in the Billions. I'm curious as to your thought's on Herb Sandler's remarks as recently as 12/25/2008 in the NYT / Michael Moss. He makes some seemingly reckless statements, as if he were immune from prosecution. The change at the Whitehouse is the only thing I can see that is preventing the justice dept. from getting heavily involved, which will be the deathknell.

Wachovia on the Cheap? Think Again

when is someone going to look at how this all happened? Jeremy Gitt former Merrill Lynch Bank Analyst added to World Board 9/8/05, Wachovia buys GDW ( World's parent) for 1.051 WB shares and $18.75 in cash, $25.5 Billion on 5/8/06 - a mere 8 months later. WB says they are acquiring a "pristine balance sheet", and 238 operating branches and a presence in the West. Herb & Marion Sandler owned 90 million shares each of GDW, 90mm X $58 + 90mm X $18.75= A big number EACH. Who was the Banker for WB in the deal? SURPRISE, Merrill Lynch. June of '07 James Judd former Pres. of World, quietly removed from his job ( first hint of a problem, similar to Enron's Jeff Skilling resigning in Aug. months in front of the implosion) The $125 billion portfolio riddled with sub prime borrowers, all allowed in due to World Underwriters "exception to policy" OUR MONEY OUR RULES- mantra Begins to unwrap. Did anybody look at the escalating NEGATIVE AMORTIZATION amounts on the balance sheet, ( a number that has to be broken out, per GAAP, and indicates the clearest sign that borrowers cannot meet current mortgage obligations. Wachovia's new management has to ask some very serious questions, this Bank was decimated along with it's shareholders. The answers were there, people were complaining, was Wachovia made completely aware of all the issues. $100 Billion in losses later, I think there is more to be told.

Trading Wachovia: Very Tight Stops Strongly Suggested

WB is just beginning to understand how badly they were taken by those wonderful folks at GDW. $25.5 B and it's been straight down ever since. 99% of the loans were ARM's, and record numbers sold in '04,'05, and '06, Jeremy Gitt (former Merrill Lynch Banking analyst) added to GDW Board in early Sept. '05, shortly there after GDW, it's $125 Billion portfolio, and 230 + Branches were acquired by unsuspecting Wachovia ( represented by ??? Merrill Lynch, I do declare) Herb & Marion, converted their 180 million shares, started a foundation, and slipped away. Pres. of GDW Jim Judd was left behind to pull the pin, the rest is history, a lot of WB investors were blindsided. I'm wondering when WB will put all the pieces together and go to court. Judd can't be accounted for, some say he's retired as announced last summer, others stipulate that he's still employed as Sr. Exec. advising the Mortgage Division, ( like asking the Boston Strangler to massage your neck), he never surfaces, and he has all the answers.
Meanwhile the portfolio of loans keeps blowing up, and should it be marked to market would show serious shrinkage. Now investors and unhappy ARM clients are finding their way to Attys. offices, as the word predatory starts to emerge, it is simply a matter of time. One or two classes get certified, and this stock will be a teenager. The Board is rallying behind Thompson, it is folly, Calif. 60% of the loan volume, and a decimated Central Valley are set to explode. Calif. litigation is a little slow to get going, but will make Enron look like a "tea party" once some of the nasty practices are highlighted. Did all the Execs. from GDW keep their stock, or did they let WB take the ride alone??? Herb??? Marion???, Jim???