Wachovia in Better Shape According to Prediction Markets

Written by:
C Costigan
Published on:

Despite receiving the most betting volume, the gambling majority does not believe that Wachovia will be closing before the year's end. There was only an 18 percent chance of this event occurring based on trending at online prediction market, Intrade.com. Compare that with 30 percent for Washington Mutual and 55 percent for Bank United Financial

Wachovia (NYSE:WB) has been reeling from losses attributed to the mortgage crisis. In July, the bank reported a second-quarter loss of $8.9 billion, or $4.20 per share. The loss included a $6.1 billion noncash goodwill impairment charge reflecting declining market valuations and asset values.

In the same period last year, the bank earned $2.3 billion, or $1.22 per share.

Wachovia's stock has traded between $7.80 and $53.10 over the last year. It was trading at $17.28 per share Tuesday morning.

Later in the day, the stock took another tumble to $16.24 following a Merrill Lynch downgrade.

Already there have been 11 bank failures in so many months with Bank United the favorite to go under next best on prediction market trends, though the volume of bets related to Bank United is quite low Gambling911.com should point out.

Diane Francis of the Financial Post in Canada sees things getting much worse in the States, especially with an Election looming and no clear indication of which candidate will win. Then again, Francis asks: "Does it really matter which one wins?".

The jittery world economy and markets are not out of the woods. For starters, there's the uncertainty of the November elections south of the border, which are being waged between two tickets, neither of which has candidates with exceptional, or in some cases, financial credentials.

That aside, things are going to get much worse for a couple of years before they get better. Stay tuned for the next, scary event involving the insolvency, and bailout, of FDIC, which backstops U. S. bank accounts. There are 150 banks on the Federal Reserve's special watch list as possible failures.

Business/Financial News

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