The details of Wachovia's first-quarter report were unfortunately familiar enough to border on dull. The quarterly loss was $350 million, brought on by some $5 billion in asset impairment and loan related charges. It's also quickly moving to make sure it has enough liquidity by cutting its dividend and raising $7 billion of new capital.
What's more interesting to consider is the fact that Wachovia, like many of its competitors, steered its financial ship directly toward the oncoming storm in the twilight hours of the housing boom. In May of 2006, Wachovia agreed to purchase Golden West Financial, a huge California savings and loan. Though the S&L was very well respected, the deal was fantastically ill-timed as it gave Wachovia tremendous exposure to the bubblicious California real estate market.
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