Wachovia Bank Corporation, the ‘geniuses’ who stepped in to guarantee the bonds for the Convention Center and Hotel Project after so many others had declined and despite the negative PKF Feasibility Study, has had its stock drop from over $50 a year ago to under $11 today.
In comparison, PNC Bank was around $70 a year ago and is at around $70 now.
Over the past few years, the lending philosophy by so many bankers was to make any loan, slap on a guarantee and syndicate it in the form of bonds, collect big year end bonus, and let some other guy worry about the fall out some years down the road.
But the damage isn’t just to the stockholders of the lending institution. This corruption of the normal safeguards of capitalism lures individuals and governments into unwise commitments. They too suffer from the the dreadful repercussions of insolvency and the lost opportunities to have used available funds more wisely.
