Wachovia Bank Stock Performance
The decline of an icon
The spectacle of a New York bank, Citicorp, and a San Francisco bank, Wells Fargo, picking over the bones of Wachovia is enough to make you sick.
In the late seventies I spent two years working for Wachovia in Winston-Salem as the product manager for retail deposit services. When I was recruited to return to Richmond, my hometown and work for my original bank employer (now, like my last bank employer, CCB, absorbed by SunTrust) my colleagues joked that I had just been away getting an advanced degree at Wachovia. In the banking world Wachovia was considered very conservative but a pioneer in retail marketing. Their credit card business was tiny by big bank standards and most “Personal Bankers” wouldn’t lend to you if they didn’t think you could handle it or that it was not in your best interest. Wachovia was jokingly called Watch-Over-Ya Bank.
But this attitude began to conflict with pressures to grow.
There was national concern that far larger banks in other countries would soon dominate the international financial scene and the Japanese would control all our valuable real estate. The securities brokers, beginning with Merrill Lynch stuck the first wedge into Glass-Steagle, the depression era legislation that separated the investment houses from banking, when they introduced the first Money Market Mutual Fund accounts with check writing access. In North Carolina, Wachovia’s two primary rivals, NCNB and First Union were pursuing growth much more aggressively and growth meant acquisitions which both affect the culture and the leadership. The Wachovia we have known recently was more First Union than Wachovia since that merger a few years ago.
The pendulum hits a wall
How’s that for mixing metaphors? Maybe we could expect the pendulum to swing back towards more rigorous credit standards and caution but who thought it would ricochet? We are already seeing mighty institutions like Wachovia and individual that can’t get out of the way.
So why am I reminiscing about this now? Because I think we’re going to survive the current crisis just like we did the “savings and loan” crisis a few years ago. Some will feel more pain than others. Some made bigger bets and should feel more pain. But most of us will get up every morning and do what we did the day before without panic because we must. I don’t think that whoever wins the election will make much difference initally . Whoever is elected, whatever their ideology, will get very pragmatic in the short run and recovery will be engineered by technicians.
Impact on local luxury home market
As we saw in the third quarter in Durham, the luxury home market did not decline nearly as much as our neighbors to the east and the west primarily because it was already pretty dismal here. In the Triangle as a whole there are going to be fewer buyers in the market. This will make it even more critical to market homes effectively to get anything sold.
The overriding theme of this site has been that in a booming market, marketing sophistication is not necessarily an advantage. In a tough market it may be your only advantage. It still amazes me when I scan the luxury home listings in Realtor.com how few agents even bother to write additional copy describing the neighborhoods and appeal of the properties they have “showcased.” I’ve covered this in great detail in the Durham Luxury Home Report. When I wrote the report, I thought most of the tactics that I was suggesting would only be necessary in Durham where the luxury market has lagged for years. But the swift decline in both Wake and Orange now signal that everybody needs to get more sophisticated.
If you want or need to sell a luxury property, I urge you to read the report and consider some of the tactical approaches. I apologize for the length (about 12 pages) but there are a lot of myths about what can and can’t be done that need to be de-bunked to understand why such a non-traditional approach should be considered. Again, the link to the report is here.
