A friend of mine asked why Wachovia Bank’s shares recently dropped by 50%. Probably because their capitalization dropped 68% from $98B to $30B over the last year.
They’re not the only ones. $4 trillion has been wiped off the total market capitalization of the U.S. stock market since last October. Of that, nearly $1 trillion is from the decline in the financial sector alone[1]. Techcrunch highlights some of the losses:
Citigroup: $236.7 billion to $97.8 billion.
Bank of America: $236.5 billion to $150.2 billion.
AIG: $179.8 billion to $32.3 billion
Goldman Sachs: $97.7 billion to $61.3 billion
American Express: $74.8 billion to $45 billion.
Morgan Stanley: $73.1 billion to $41.1 billion.
Fannie Mae: $64.8 billion to $700 million.
Merrill Lynch: $63.9 billion to $24.2 billion
Freddie Mac: $41.5 billion to $300 million.
Lehman Brothers: $34.4 billion to $2.5 billion.
Washington Mutual: $31.1 billion to $2.9 billion.
The New York Times offers a nice graphic of the losses in their article A Year of Heavy Losses.
US Bancorp, State Street and Northern Trust bucked the trend and saw increases in capitalization. What is it that they did that the other 27 banks on the list didn’t do?
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