Wachovia Bank Up +85% over the last five days after announcing record losses

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muzie_IHB

muzie_IHB

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Gosh, the market is just absolutely crazy right now. Wachovia announced they lost more in the last quarter than they make in an entire YEAR and the market rewards them by almost doubling the action price.



May you live in interesting times, as they say.
 
Sigh.



WB is basically where it was two weeks ago.



It's called over sold on bad news.



Even with the run up, it's half of where it was last quarter at this time.
 
I agree that it's "only" back to where it was about 2-4 weeks ago. Still, it's just crazy to bump up the stock +25% on the day where its earnings are much worse than expected. Basically, nothing short of a catastrophic loss would have caused caused the stock price to drop at this point.



In other news, analysts expected WaMu to report a 500M loss this quarter. Earnings just came out after the close and WaMu just reported a 3 BILLION loss in the quarter. That's a loss bigger than their entire market cap at the moment.



Looking at the pattern it's very probable WaMu will get a +25% pop of its own on this great piece of news. It's already up 6% in after hours trading. *shakes head*



Feels just like the dot com boom this week, when the hottest companies were the ones burning through money the fastest.
 
Insanity is the word.



There is no there there.



I will resume looking at where the mkt is when I read on the blogs that it has

finally crashed. Looking hard at insanity is extremely depressing.



I feel like I am waiting for the end of the world. The suspense is killing

me. Just let it be over with so we can start anew.
 
[quote author="no_vaseline" date=1216784675]Unwinding of naked short covering.



The SEC needs to wind back the clock on it's trading rules 18 months.</blockquote>


Exactly. Vaseline. Short Cover Rally.



Hey. Whats a 9 Billion Dollar Loss.

You got to love that California Market if your a Wachovia

old timer back in South Carolina.
 
[quote author="bltserv" date=1216791028][quote author="no_vaseline" date=1216784675]Unwinding of naked short covering.



The SEC needs to wind back the clock on it's trading rules 18 months.</blockquote>


Exactly. Vaseline. Short Cover Rally.



Hey. Whats a 9 Billion Dollar Loss.

You got to love that California Market if your a Wachovia

old timer back in South Carolina.</blockquote>
Well since WAMU "only" had a $3.3B loan this quarter, we can expect the bank stocks to rocket up tomorrow since the worst is over, right? haha These dogs will get slammed again, just give them some time. I loved how the new CEO of Wachovia "asked for time" from the investment community to straighten things out. All that time will do is had more billions in losses and bring the stock down under $5/share plus another CEO getting fired.
 
The markets run on two emotions: fear and greed. The greed may be obvious, but I think today's run up in WB and WaMu was based on fear; the fear of missing out on the next bull market. Everyone assumes that the financials have to go up because they have been beaten up so terribly. And of course, the extreme write downs have to signal that the credit crunch and the worst is over. I doubt it. My guess is that this rally is a bear trap and the buyers of financials today will get their a__es handed to them.
 
[quote author="awgee" date=1216808768]The markets run on two emotions: fear and greed. The greed may be obvious, but I think today's run up in WB and WaMu was based on fear; the fear of missing out on the next bull market. Everyone assumes that the financials have to go up because they have been beaten up so terribly. And of course, the extreme write downs have to signal that the credit crunch and the worst is over. I doubt it. My guess is that this rally is a bear trap and the buyers of financials today will get their a__es handed to them.</blockquote>


Just as nutty today was the dollar's response to Paulson saying that a strong dollar is important to the US. He has been saying this since he became Secretary of the Treasury and the dollar has done nothing but drop for the last two years.
 
This might be why...lol...fed to the rescue! They vote on it this week!



http://www.bloomberg.com/apps/news?pid=20601087&sid=aJft6iw0H_Pg&refer=home
 
"Frank said lawmakers, defying a White House veto threat, decided to keep <strong>provisions for $3.9 billion to help local communities buy up foreclosed properties</strong>. The Bush administration opposed the idea because it said it would aid lenders who now owned the vacated properties, not struggling homeowners. "



"The Treasury would be barred from providing aid that would cause a breach in the federal debt ceiling under the agreement, a constraint aimed at limiting any taxpayer losses. <strong>The debt limit would be raised to $10.6 trillion from the current $9.815 trillion</strong>."



"A Congressional Budget Office estimate released today put the <strong>cost of Paulson's plan at $25 billion</strong>, a figure below the total that some lawmakers had expressed concern about. "



This is going form bad to worse. It's unclear to me why the plan is supposed to cost "only" 25B$, while the debt limit has been increased by 800B$. Must be something I'm misunderstanding here.



I guess it's hapenning. We are bailing out all those who bought during the bubble run-up and ran away with the money.
 
<em>"There is roughly $6.84 Trillion in bank deposits. $2.60 Trillion of that is uninsured. There is only $53 billion in FDIC insurance to cover $6.84 Trillion in bank deposits. Indymac will eat up roughly $8 billion of that.




Of the $6.84 Trillion in bank deposits, the total cash on hand at banks is a mere $273.7 Billion. Where is the rest of the loot? The answer is in off balance sheet SIVs, imploding commercial real estate deals, Alt-A liar loans, Fannie Mae and Freddie Mac bonds, toggle bonds where debt is amazingly paid back with more debt, and all sorts of other silly (and arguably fraudulent) financial wizardry schemes that have bank and brokerage firms leveraged at 30-1 or more. Those loans cannot be paid back.




What cannot be paid back will be defaulted on. If you did not know it before, you do now. The entire US banking system is insolvent."

</em>


Mike Shedlock
 
<a href="http://finance.google.com/finance?client=ob&q=NYSE:WB">http://finance.google.com/finance?client=ob&q=NYSE:WB</a>



Go look at a one month chart for WB. It gave back about half of that 85% OP was talking about.
 
Yes, thankfully the market came back to its senses. It felt like running in an asylum there for a while.



Their CFO resigned, too.
 
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