Weep for Wachovia

Wow...

Wachovia is trading below $10 for the first time since May 1991. Is this just a temporary panic and a great buying opportunity, or is Wachovia's trip to the woodshed justified?

The last time that WB traded below $10:

Gas was $1.10. The Dow had just broken 3000. Americans were protesting Apartheid, watching the Soviet Union crumble, and searching desperately for Jeffrey Dahmer. Now, over 17 years later, it's Wachovia Investors that taste like chicken, and new CEO Robert K. Steel will do well just to avoid the death penalty for the venerable bank, which has lost over $100 BILLION in market capitalization since its March 2006 highs just over 2 years ago.

So, is it a buy?

Not until a few things happen. First, Chairman Lanty Smith must resign. His disastrous Golden West acquisition and failure to implement a CEO succession plan were avoidable disasters. Management has lost all credibility with the market. Second, fundamentals must play out. The continued credit woes, sluggish earnings growth, and further write-downs will keep Wachovia, and a lot of other banks, in the pen for quite some time. While I agree that a catastrophic failure of the bank ala Bear Sterns is not likely, having watched IndyMac & Fannie/Freddie, the prospect of a WB failure is regretfully a real one. If you own it, hold tight. But, as far as bottom fishing--I say don't jump back in just yet.