Quote of the day: Wells and BofA are choking on acquisitions


Chris Whalen, a well-regarded bank analyst, ran an interview piece with Nouriel Roubini on Barry Ritholtz’s site. The conversation was very illuminating and I highly recommend reading the whole post linked below. However, I wanted to point out a quote from Chris in the piece that I find significant in light of the recent dividend cut by JPMorgan Chase.

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The difference between BAC and WFC, and JPM on the other hand, is that Jamie Dimon, who we like more and more, bought WaMu for three cents on the dollar of assets. WFC bought Wachovia whole, without a resolution. So JPM does not have to soft-pedal on foreclosures, despite what you read in the newspaper, and they don’t have to write anything down. WFC and BAC are choking on their acquisitions because they were not restructured first.

I am very impressed by Jamie Dimon. He has been as cautious as any of the big bank CEOs as evidenced by the lower writedowns at JPM and the firesale acquisition prices. Even the pro-active dividend cut smacks of prudent foresight. If any big bank can survive this mess, it will be JPMorgan Chase.

Now What for the Big Banks?: Interview with Nouriel Roubini – Chris Whalen, The Big Picture

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