So I have been out on vacation the last few days and my phone has been getting lit up with txt messages from friends/buddies re: Fannie Mae/ Freddie Mac, WAMU, etc and they are curious re: my thoughts about it. To be honest, I was COMPLETELY out of the loop on this as I was enjoying my time off.
I read this commentary re: WAMU and its CEO getting axed yesterday and it really rang a bell with something that Jim Cramer talked about re: how the FDIC's new strategy is going to be a HUGE win for regional banks.
Here is something to chew on. From something I read.....not Cramer....
"Kerry Killinger was one of those lucky guys in the right place at the right time. He built WAMU by buying distressed thrifts out of the last S&L crisis. It was a lucky streak of acquisitions. Essentially he had acquired a bunch of rain buckets which collected the mortgage refi bounty resulting from the lowest bond yields in history. He never effectively integrated those acquisitions. When the drunken refi mortgage party ended, he couldn't pull himself away from the tap and charged headlong into subprime to keep the party going. It was a disaster in the making."
Now hear Cramer's take on the FDIC and their changing strategy re: banks.
http://www.thestreet.com/story/10435631/1/cramers-mad-money-recap-fdic-to-the-rescue.html
While in Vegas the end of last week and early this week I noticed that Zion's bank (one of their subsidiaries) had taken over a large Henderson NV bank via the same method in the link above. So we now have TWO examples of regional banks buying deposits cheaply and getting bigger. We just have to hope that these folks HIRE or already have people that can integrate all these systems/banks together.
For the record, Cramer likes BB&T, a bank that he considers a conservative regional lender with a sound balance sheet that should be allowed to buy these guys on the cheap throughout FL and the SE.
Dan Ross
http://www.BetterBizIdeas.com
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