Jim Cramer on Wachovia CEO Bob Steel (2008)

I think Bob Steel's the one guy I trust to turn this bank around, which is why I've told you on weakness to buy Wachovia.

~ Jim Cramer, CNBC commentator, March 11, 2008

(Two weeks later, Wachovia came within hours of failure as depositors fled. Steel eventually agreed to a takeover by Wells Fargo. Wachovia shares lost half their value from Sept. 15 to Dec. 29.)

David Dreman recommends "gold-standard financials" for 2008

For 2008 I recommend holding on to these three gold-standard financials: Fannie Mae (37, FNM), Wachovia (35, WB ) and Bank of America (39, BAC ), as well as Washington Mutual (14, WM ) and CIT Group (22, CIT ). As the experience of the 1990s shows, they will have substantial upside once the current fright subsides.

I expect the market to likely end the year flat or down somewhat. A real bear market, which we can define as a 20% decline, is quite unlikely from here.

On the positive side: A recession is not likely. The financial panic will gradually ease as we move into 2008. Investors will crawl out of their fallout shelters. Remember that this is an election year, and the incumbent party will do what it takes to prime the pump. Increased federal spending and more Federal Reserve easing are givens. My high-quality financial stocks will soar once that becomes apparent. Just as they did in the early 1990s, banks will maintain fairly good yields on their assets while their funding costs go down. BofA earned $4.70 a share in precrisis 2006. I think it will earn $5.50 or more in postcrisis 2010.

~ David Dreman, "Tug of War," Forbes, February 11, 2008

Jim Grant on the negative amortization mortgage

Howard Hughes's 1966 sale of his controlling interest in Trans World Airlines for $566 million may not stand as the greatest exit in capitalism. A strong and rising contender for that honor is the 2006 sale of Golden West Financial to Wachovia for $25.5 billion. One important part of the success of Golden West management was innovation. It was the team of Herbert and Marion Sandler that helped to develop the negatively amortizing mortgage.

It's an iron law of financial innovation that every good idea is driven into the ground like a tomato stake. So it has gone with the neg-am mortgage.

~ Jim Grant, "Limits of Leverage," Grant's Interest Rate Observer, April 4, 2008

Wachovia's Ken Thompson on their 4 large acquisitions

I’d say look at our track record. We’ve done four large mergers since I’ve been CEO and they’ve all been successful.

~ Ken Thompson, CEO, Wachovia, as appeared on CNBC (interview with Maria Bartiromo), June 28, 2007