Wachovia (WB) Smashed As Investors Freak About WaMu

Yesterday, unsecured WaMu (WM) bonds were trading at 48 cents on the dollar. Today, they’re worth zero.  Wachovia (WB) investors are understandably freaking out.

According to CNBC, the price of Wachovia credit default swaps has soared, and the stock is down about 40% in the pre-market, to $9.

The fundamental issue here is the value of the assets on Wachovia’s balance sheet. JP Morgan marked down the value of WaMu’s assets by 10%. If Wachovia’s assets carry similar pie-in-the-sky marks, the company could be headed for devastating markdowns.

We have yet to see a detailed analysis of WaMu’s current balance sheet vs. Wachovia’s. If anyone has one, we’d be grateful if you could send it along. (Henry Blodget: [email protected]).

See Also: WaMu Toast, Wachovia Next?

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