It seems as though Wachovia is cutting jobs to compensate for another huge loss. This former small North carolina bank knows what it’s like to grow over the years. Too bad they did not follow the Wells Fargo model of pricing by risk, as opposed to the HSBC Finance model of giving loans to anyone and everyone. The losers are the 11,000 people that are out of work. It looks like mortgage heydays are like eating an ice cream cone in the hot Carolina cotton fields – it will not last forever.
Wachovia Corp. reported a surprisingly large second-quarter loss Tuesday, deflating Wall Street’s hopes that the nation’s big banks are weathering the credit crisis well. The nation’s fourth-largest bank by assets said it lost $8.86 billion, is slashing its dividend and eliminating 10,750 positions after losses tied to mortgages soared. As other banks rejected cries of discrimination when they would not give risky loans to those who should not even buy a car on credit, Wachovia now finds itself in a jam. Wachovia might long for the good old days as a small bank back when textile mills still operated in North Carolina and tobacco was king.