As the battle over the remains of the faltering Wachovia banking embire continues, we learn from court papers that the Federal Deposit Insurance Corp. (FDIC) was just days away from seizing the failing bank.
The latest news suggests Wells Fargo and Citibank will split Wachovia at a cost of $15 billion or more while the fate of the area’s largest bank lies in the balance.
Federal officials continued their fervent quest Wednesday to reach an agreement between Citigroup and Wells Fargo over the fate of Wachovia Corp. — which could include the splitting up of the bank.
Discussions between the Federal Reserve, Citigroup and Wells Fargo continue, said a person familiar with the situation, adding that all options are being reviewed. The person spoke on condition of anonymity because of the sensitive nature of the talks.
According to a court transcript of a teleconference between Wachovia and Citigroup lawyers and U.S. District Judge Lewis Kaplan held Wednesday, the negotiations center on "a possible grand solution." That could involve splitting Wachovia between Wells Fargo and Citigroup.
"There are negotiations between Wells Fargo and Citi about a possible grand solution that would preserve the shareholder value for Wachovia as represented by the Wells Fargo deal, but that would involve not a single choice between Citigroup and Wells Fargo," said David Boies, a lawyer for Wachovia, according to the transcript.
After the battle for the Charlotte, N.C.-based bank moved to both state and federal court over the weekend, the parties agreed Monday to a cease-fire of all litigation at the urging of Federal Reserve officials. But that agreement expired at noon Wednesday without a resolution on the fate of Wachovia. Citigroup and Wells Fargo agreed Wednesday to extend the standstill until 8 a.m. EST Friday.
In its march to bigness and failure, Charlotte-based Wachovia took over two Virginia-owned banks: Old Dominion and Central Fidelity. Amy and I banked at Central Fidelity while living in Arlington and it was a good local bank with outstanding customer service. That customer service vanished when Wachovia took over and we vanished as well.
Sometime in the near future, the Wachovia name will disappear from Roanoke’s tallest building. It won’t be the first bank name to disappear from the area and I doubt it will be the last.
When I lived in Roanoke from 1965-69, the dominant banks in the area were First National Exchange, Mountain Trust and Colonial-American National banks. All had offices on Jefferson Street. All are long gone.
In 1981, we moved from Illinois to Arlington and transferred our accounts to Virginia National Bank, which had a branch just across the street from our condo. After a few years, VNB and Farmers National Bank merged and they became Sovran Bank, then another bank took them over and they became NationsBank until Bank of America bought the whole shebang.
When First National Bank of Christiansburg began construction on its Floyd Branch, it was an area bank headquartered just down the road. Then it merged with a Charlottesville Bank and became Stellar One with corporate offices in Albermarle County.
Blue Ridge Bank merged with nine other Virginia banks to become Carter Bank & Trust with headquarters in Martinsville.
So far, The Bank of Floyd remains the county’s only locally-owned and operated bank although the bank has more branches in Roanoke County than Floyd.
Continue reading …If you use a credit card, be careful where you shop. If you want to keep using that credit card you’d also better be careful in picking a mortgage (assuming, of course, that you can get one).
Banks and credit card giants like American Express are expanding the criteria they use to determine how much credit, if any, they will give to customers.
As the global credit crunch reaches from Wall Street to Main Street, guilt by association has become a tool for evaluating the creditworthiness of American Express customers.
Among other criteria, cardholders are seeing limits reduced because of where they live, where they shop and who holds their mortgage.
“Absolutely unbelievable!” said Jesse Gilleland of suburban Washington, D.C., who says revisions of his American Express accounts and credit limits, at least partly for those reasons, could force him to close his once-thriving computer-consulting firm.
A letter sent to Gilleland by American Express, one of the nation’s largest credit-card issuers, includes these reasons why the spending limit on his Platinum Card was reduced:
Our credit experience with customers who have made purchases at establishments where you have recently used your card.”
Our analysis of the credit risk associated with customers who have residential loans from the creditor(s) indicated in your credit report.”
Credit-card experts and consumer advocates say that while such practices have been rumored for some time, this is the first time they’ve seen them cited as criteria for a credit limit reduction.
When banks lower credit limits it also affects your credit score.
The latest victim of the lending crisis could be your credit score.
Even if you haven’t been directly affected by subprime mortgage problems, your score could take a hit. That’s because new research says a majority of credit card lenders are lowering credit limits to reduce their risk in the wake of the credit crunch.
When a customer’s available credit goes down, for any reason, it brings the current balance closer to the limit. That can lower the consumer’s credit score substantially.
Why? A key component of credit score calculations is the ratio of used credit to available credit — the "utilization ratio." About 44 percent of cardholders carry a balance at least occasionally. For them, any reduction in credit limit lowers the ratio, lowering their credit scores.
"It’s quite an issue," says Linda Sherry, director of national priorities for Consumer Action. When the organization conducted a recent online poll, 11 percent of participants reported they’d had credit limits lowered in the past six months. "It shows us that something is definitely going on out there."
Using a credit card at a "rent to own" store can also affect your credit rating. The MSNBC report continues:
Continue reading …Ed Mierzwinski, federal consumer program director with the U.S. Public Interest Research Group, said, “There’s no question that this type of behavioral score is used by everyone. They just don’t like to admit it. … It sounds like American Express is dialing up the impact.”
For instance, Mierzwinski said, “For years, you’ve been dinged if you purchased your stuff at a rent-to-own store on your credit card. The ding used to be very small. It sounds to me like they’ve dialed up the ding.”
Incumbent Republican Congressman Virgil Goode has a long, sordid record of animosity against Muslims, African-Americans, Hispanics and, apparently, even Italians.
So he’s running ads against his Italian-American Democratic opponent that use a darkened photo that leave the impression that Tom Perriello could be Middle Eastern, Hispanic or even — God forbid — black.
The ad is smear politics in its lowest, basest form and prompted a well-deserved and strong editorial in The Roanoke Times:
Rep. Virgil Goode’s latest foray into the politics of fear goes too far.
Granted, distorting opponents’ views in political campaigns is so commonplace that the practice barely garners a public shrug. A recent Goode TV attack ad is something different, though, and warrants voter disgust.
Way beyond simply and only slightly distorting his opponent’s stand on domestic oil drilling, the Republican incumbent in Virginia’s 5th Congressional District distorts Democrat Tom Perriello’s appearance. And the distortion seems designed to encourage ugly nativist fears.
As a voice-over warns viewers that Perriello is "wrong for Virginia," the ad shows a still image of the candidate shaded so darkly that he could be Middle Eastern — or perhaps Hispanic. Voters can see whatever "other" stirs their distrust.
This kind of fear mongering is business as usual for Goode. I watched him spread his snake oil during my years in Washington and it made be sick to my stomach that this racist and misogynist not only came from my home state of Virginia but also from neighboring Franklin County.
But his ad, sick as it is, is also business as usual for the Republican Party. I know because, to my shame, I worked for too long as an operative for the GOP. I served on Capitol Hill as an aide to three Republican Congressmen. I was a political operative in the 1984 Reagan-Bush campaign and dozens of House and Senate campaigns and later as a communications associate for The Eddie Mahe Company, a prominent GOP political consulting firm.
During those years, I not only observed, but participated in, too many organized campaigns of character assassination, smear campaigns and outright distortion of facts to serve the Republican cause. I made a lot of money working for Republicans. I’m not proud of it but it happened.
What Goode is doing is just one part of a well-organized, heavily-funded and tightly-orchestrated GOP campaign of fear that runs from the grassroots to the national political parties. The current campaign of fear-mongering by the McCain campaign against Barack Obama falls under the same umbrella and is designed to raise fear about Obama’s race.
As The Associated Press pointed out this week:
By claiming that Democrat Barack Obama is "palling around with terrorists" and doesn’t see the U.S. like other Americans, vice presidential candidate Sarah Palin targeted key goals for a faltering campaign.
And though she may have scored a political hit each time, her attack was unsubstantiated and carried a racially tinged subtext that John McCain himself may come to regret.
First, Palin’s attack shows that her energetic debate with rival Joe Biden may be just the beginning, not the end, of a sharpened role in the battle to win the presidency.
"Our opponent … is someone who sees America, it seems, as being so imperfect, imperfect enough, that he’s palling around with terrorists who would target their own country," Palin told a group of donors in Englewood, Colo. A deliberate attempt to smear Obama, McCain’s ticket-mate echoed the line at three separate events Saturday.
To be fair, both sides use negative ads but I know from working inside the Republican Party that their attacks are too often driven by racism (both overt and latent), homophobia and fear of anything that is not white, Anglo-Saxon and pseudo-Christian.
Franklin Roosevelt said "the only thing we have to fear is fear itself." In this election, we must fear the fearmongers even more.
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While on a long motorcycle ride through the passes and bypasses of Southwestern Virginia recently, I noticed an interesting, but disturbing, trend in the sea of political signs that cover the landscape.
In Republican front yards, you find signs touting GOP Senatorial candidate Jim Gilmore, the party’s choice for the House (different names depending on the district) and, of course, the signs promoting John McCain and Sarah Palin in the Presidential race.
In many Democratic yards, however, you see signs promoting Senatorial choice Mark Warner, House choices like Rick Boucher, but no signs for Barack Obama and Joe Biden.
Oversight? I doubt it. Racism? Yep. I’ve even seen some yards promoting Warner, Boucher and McCain.
McCain will probably carry Southwestern Virginia, even as racist incumbent Senator George Allen did two years ago, although Allen lost when more enlightened members of the electorate cast their votes elsewhere in the state. And voters around here continue to send blatant racists like Virgil Goode back to Washington.
We can talk until the cows come home about how Southwestern Virginia has changed for the better but the sad fact remains that racism still has strong roots in this part of the state. I’ve overheard too many overt racist comments about Obama in the last few months and racism, unfortunately, extends beyond the Blue Ridge Mountains of Virginia.
If Obama were white and had a more Anglo Saxon sounding name, McCain and Palin wouldn’t stand a chance. But he’s half black and that’s a problem when racism remains part of our national heritage.
Writes Charles Babbington of The Associated Press:
Continue reading …Since the nation’s birth, Americans have discussed race and avoided it, organized neighborhoods and political movements around it, and used it to divide and hurt people even as relations have improved dramatically since the days of slavery, Reconstruction and legal segregation.
Now, in what could be a historic year for a black presidential candidate, a new Associated Press-Yahoo! News poll, conducted with Stanford University, shows just how wide a gap remains between whites and blacks.
It shows that a substantial portion of white Americans still harbor negative feelings toward blacks. It shows that blacks and whites disagree tremendously on how much racial prejudice exists, whose fault it is and how much influence blacks have in politics.
One result is that Barack Obama’s path to the presidency is steeper than it would be if he were white.
Wachovia, the struggling Charlotte-based financial giant that is also our area’s largest bank, began the week selling its banking operations to Citibank, but has now changed its mind by weeks end and is selling all of its financial operations instead to San Francisco-based Wells Fargo.
Continue reading …In an abrupt change of course, Wachovia Corp. said Friday it will be acquired by Wells Fargo & Co. in a $15.1 billion all-stock deal, wiping out Wachovia’s previous plan to sell its banking operations to rival suitor Citigroup Inc.
A key difference is that the Wachovia deal will be done without government assistance, while the Citigroup deal would have been done with the help of the Federal Deposit Insurance Corp.
The Wachovia-Wells deal, announced Friday, comes in a turbulent time for banks and financial firms as they grapple with the ongoing credit crisis, which led to the recent bankruptcy of Lehman Brothers Holdings Inc. and the failure of Washington Mutual Inc.
Wachovia shareholders will receive 0.1991 shares of Wells Fargo for every share of Charlotte, N.C.-based Wachovia stock they own, valuing Wachovia at about $7 per share. This is a nearly 80 percent premium over the stock’s Thursday closing price of $3.91. Shares closed at $10 last Friday, the last trading session before the deal with Citigroup was announced.
On Monday, Citigroup had agreed to buy Wachovia’s banking operations for $2.16 billion in a deal orchestrated by the federal government.
That deal, which had been approved by the boards of both companies, was still subject to approval by Wachovia’s shareholders and regulators.
Situated with a scene view atop the rolling hills around Bedford, the National D-Day Memorial is a fitting tribute to those who sacrificed so much during the battle that changed the course of World War II.
The sweeping memorial includes the names of all who died in the battle and the statues honor those who landed on the beaches.
I stopped by the memorial on my way back from a visit to Lynchburg last Sunday and am only sorry that i did not visit earlier.
Admission is $5 and worth the cost. Guided tours are available as well as a narrated tour that you can access on your cell phone.
Shawn Brent Gerald, the 28-year-old son of Floyd County Supervisor Fred Gerald of Indian Valley, died Sunday night when his motorcycle crashed into a car turning left on U.S. 11 near Fairlawn.
The driver of the car, Jerry Wayne Viars, 35, of Max Meadows, was charged by Virginia State Police with driving under the influence of alcohol.
State Police Sgt. Michael Conroy says an initial investigation into the accident shows Gerald racing with a Ford Mustang at the time of the accident. The driver of the Mustang fled the scene and police are still seeking information on the car and its whereabouts.
"There are multiple factors," Conroy told The Roanoke Times. "And if you take away one of them, you may not have had this tragedy in the first place. Here you have speed, you have alcohol."
Any parent who has ever lost a child in a senseless, tragic accident such as this knows the pain Gerald’s family feels. As one who also rides a motorcycle, I know full well the dangers that come from traveling the public roads on two wheels. Taking chances on a bike only increases the danger and lowers the odds for survival. As a recovering alcoholic who works with others who battle the beast of substance abuse, I also know that climbing behind the wheel of a car while drunk turns one into an instrument of death.
Life is precious and can be cut short in an instant. My condolences to Fred and his family. Knowing a tragedy such as this could have been avoided does not lessen the sorrow and sense of loss that all of us feel.
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