The Uptown paper of record picks up on the Wachovia in play game and adds a few wrinkles. However, I think the foreign bank takeover scenario is extremely unlikely.
Foreign banks are going to take one look at wounded UBS, the conservative Swiss bank that thought it could make a killing in the American subprime mortgage market, and think thrice about taking on Wachovia and its Golden West problem.
Another thing to keep in mind is that any deal will be essentially brokered by the New York Fed. The Fed does not like turmoil in money center banks, which is exactly what we have right now.
Update: Heard Center City Partners honcho Michael Smith on WBT this morning really spinning hard the notion that a new CEO will keep Wachovia’s current Charlotte civic footprint because it is in the bank’s “DNA.” Whoa. Anyone who thinks that everything Ken Thompson did — yes, Quail Hollow that means your little ball whacking outing — is not on the table is kidding themselves.
Given the structural challenges the bank faces with its mortgage portfolio, highly visible — and mostly meaningless — changes like cutting back on the corporate party time stuff is exactly in the crosshairs. And if Smith and the other Uptowners think that Wachovia’s Queen City execs would put up much of fight for the Uptown goodies, that is a big assumption too. Think — which would they rather lose a golf tourney — or their six and seven-figure jobs?
Even veteran Uptown cheerleader Doug Smith gets it. Smith wonders if the 46-story condo component of the new $880m. Wachovia HQ gets built now. Shareholders notice things like spending almost a billion on real estate. At a minimum things are going to be up in the air for the rest of the year. If you really care about Charlotte, the focus should be on getting Wachovia healthy by any means necessary, not saving little junkets.
