Tomorrow is our nation’s birthday. Happy 4th of July to one and all.

With what is happening today, it’s a wonder we’ve lasted as long as we have. I think one of the reasons we seem to keep overcoming depressions, recessions, housing bubbles, credit crisis, etc is because we are naturally givers. We the people always are willing to help those who have been stricken with problems.

I will mention only one problem solver in this post out of the myriad of candidates. The fellow was the son of Lebanese immigrants who made it big in Hollywood and whose family name still has credibility.

The Man, The Myth, The Legend

I don’t know how much myth is involved with the Thomas family. Everyone has heard of Danny and his daughter Marlo. Danny is no longer with us but his daughter Marlo is alive and well. This post isn’t as much about her as it is him.

His movie and TV credits are well known but I’d bet most of us couldn’t name one film or TV show in which he starred. But, on the other hand, I’d bet we could all mention his creation - St. Jude Children’s Research Hospital located in Memphis, TN. It opened in 1962 and had such personalities as Frank Sinatra, Milton Berle, Dean Martin and Elvis Presley as supporters/endorsers.

Not many of us know Thomas founded the American Lebanese Syrian Associated Charities to raise the money to build, operate and maintain the hospital. How about that for a surprise in today’s environment'

Four Pillars

Thomas founded the hospital on four pillars that still stand today. It was to provide unsurpassed patient care. It was to provide unparalleled scientific research. It would be a hospital without walls taking in children from all over the world and never deny care because of race, religion or ability to pay.

Doesn’t this sound like the basis for today’s equal opportunity mantra' Just agree because it does.

One of their accomplishments include raising the survival rates for childhood cancers from less than 20 percent to more than 70 percent. Read that again, it is that impressive.

Mind you, through all of the adversity the hospital still stands committed to the four pillars.

Stretch Our Imagination

Danny Thomas certainly wasn’t the only celebrity to charge down charity lane and he won’t be the last. However, how many celebrities can you name today who are this committed to a cause'

Given tomorrow is a big day, why not use part of it to stretch our imagination and wonder out loud in letters to the editor, community blogs, phone calls to talk shows, etc. to encourage celebrities to imitate Danny Thomas. In these days of multi-million dollar draft picks, big dollar sport contract re-negotiations, record high CD sales and the like, why can’t we start the leverage the celebrity movement.

Celebrities enjoy a status second to none so it would be easy to leverage their celebrity in the face of any problem we have. Most of today’s youth are already hooked on celebrity. They would be the worker bees that keep the movement rolling.

I don’t say any of this tongue and cheek because we are in real serious dookey. I’ll use GM as a proving point. Who owned GM'

If you believed in what our system of economics told you, it was the stockholders. The stockholders were the actual owners because that is how ownership was created by corporations. In fact, the government made corporations follow a certain blueprint through laws and tax codes or they didn’t qualify as a corporation.

As I write this, the stockholders no longer exist. The government has taken their place. It doesn’t make any difference how this happened, because it did.

But what if we had celebrities leading the opposition to the governmental takeover' What if these celebrities stood foursquare with the stock and bond holders'
I bet the new owner wouldn’t be the new owner.

Leveraging Celebrity

Let me repeat myself and say we as a people can solve any problem or crisis as it hits us with the right kind of leadership. This of course begs the question will celebrities be the right kind of leadership'

The answer is a resounding yes if we tie their performance to their celebrity status. Fail and they lose celebrity status. Succeed and they keep celebrity status.

We know celebrity can be leveraged. I wonder if we are willing to do it' Happy 4th of July…

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Leveraging Celebrity

Think the big banks would be at least a little grateful to American taxpayers for bailing them out with their money' Yeah, right!

A published report the other day says these “too big to fail” institutions are doing everything in their taxpayer fueled power to head off a proposal by President Obama for a consumer protection agency.

The proposed agency would, among other things, regulate home loans.

Did I say “regulate'” Now, there’s a word banks don’t like very much.

But regulation was exactly what was needed–stricter regulation–when banks and other lending institutions were helping create the worst economic disaster in this country since the Great Depression.

The New York Times quotes the president of the American Bankers Association as saying, “It’s going to be a huge fight. This agency would have broad powers that go beyond every consumer law that has ever been enacted.”

Well, that sort of sounds like a good thing to me!

The fact is, the banks, and many real estate brokers, have and are getting away with fiscal murder….and, they know it. That is why they are fighting so hard to head off anything that might get in their way of business as usual.

We may or may not be at the very beginning of a modest,at best, real estate recovery—declines in home prices in some places are slowing–and prices actually are up in cities like Denver, apparently.

But lending institutions can’t be allowed to simply pretend that nothing really bad has gone down…that would only set everyone up for yet another real estate bubble followed by another real estate burst.

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Banks Want Free Field That Could Lead To Another Real Estate Bubble-Burst Cycle

While the turmoil in the residential real estate markets continues to make headlines, some analysts and prognosticators are questioning whether we will see the same kind of meltdown and mass foreclosures in the commercial real estate side of the industry. And the general consensus of those quoted in various news services and website across the United States is not good.

Overview of Commercial Market Status

The commercial real estate market, including retail malls, multifamily buildings, office buildings and other non-residential buildings has already been hurt by falling prices, unemployment, economic decline and foreclosures. However, as already mentioned, commercial real estate includes many different property types, which perform differently under the same economic conditions. For example, retail malls have been adversely affected by numerous issues such as the credit crisis, lower consumer spending, retail competition from the internet and changing consumer behavior. These economic factors that have already caused the bankruptcy of major malls across the United States may not have the same affect on the multifamily real estate market due to the fact that the demand factors influencing apartment buildings are completely different from those of a retail mall. In fact, some of the issues now hurting retail malls could actually increase demand for affordable multifamily housing.

Can Multifamily Thrive in This Down Market'

Millions of people have seen their homes foreclosed upon over the past two years. These people may not be shopping every weekend at the local mall for a new pair of designer jeans but they will still need a place to call home. With tightening credit guidelines for residential mortgages and falling residential home prices it is a logical presumption that many of these displaced people will be seeking multifamily housing. As most apartment building investors understand, it is difficult to find reliable statistics for multifamily housing demand. This is due to the fact that demand for multifamily housing varies according to local economic factors. For example, demand for multifamily housing may increase or decrease according to the local job market.

One of the factors that does seem to be affecting all property classes in the commercial sector of the real estate market are commercial mortgage backed securities. According to Forbes.com the issuance of commercial mortgage backed securities reached its highest point in 2007. Most of these bonds are for duration of ten years and have a fixed rate of interest. These bonds become due in 2017. While this is true for the majority of large retail commercial projects, many apartment building owners have five year loans that become due in 2010 or 2012. Because of stricter underwriting guidelines and depressed values, these owners may find it difficult to refinance without having to put up more cash to facilitate the loan.

Photo Credit: sashafatcat

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Is Multifamily Immune from Commercial Real Estate Decline'

With so many ways to make money in real estate, how are you going to choose to make your money'  Investors can make loads of money in residential flips or rehabs or commercial buildings, apartments, self storage, mobile homes, even vacation property.  There are even different ways to profit in each of these asset classes, it just depends on how you wish to exit.

Here is a list of different exit strategies

So which one do you choose'  Many investors do not wish to use any of their own money or take any risk and they wholesale deals.  Others flip or rent and hold for positive cash flow even lease option or refinance.  But what if you run into an unpleasant surprise or your exit strategy does not work'

Items that could ruin your exit strategy

These are just a few reasons why savvy investors avoid losing money on deals by having multiple exit strategies. If you are unsuccessful flipping a property you may be able to rent, lease option and even get a lower payment or take cash out with a refinance. Or if you cannot find good property management or good tenants then you can flip the property.  Multiple exit strategies give investors backup plans if your 1st exit is unsuccessful.  Most investors that have done enough deals have run into surprises or exit strategies that did not go as planned.  Avoiding loses is crucial, you may ruin credit, ruin good relationships with investors and integral parts of your team, even end up bankrupt.  Avoiding the valleys will also allow your portfolio to grow more over time.

Simply put, multiple exit strategies will lower risk, not to mention, let you sleep at night. My advice, always have multiple exit strategies.

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The Benefits of Multiple Exit Strategies for Real Estate Investors

Almost nobody gets rich quickly in the real estate business. You will probably get rich slowly like most of us. You will make $5,000 off a wholesale deal, $30,000 off the back-end of a lease option, $10,000 from another wholesale deal and $50,000 from a pre-foreclosure. Making this money takes time, but once you get good at this business the money slowly begins to add up.

Have You Caught Fire Yet'

However, there comes certain times throughout your real estate career where you “catch fire”. For one reason or another you will catch fire and you’ll get more deals than you can possibly handle. This happens in spurts and I’ve experienced it multiple times.

Perhaps it will be a call from a landlord who owns 25 houses and wants to dump them all. Or maybe you just sent out a direct mail letter that’s getting an awesome response rate and the leads just pour in.

Now, when this happens guess what' Many investors freeze up. They get so overwhelmed that they do nothing and just bury their heads in the sand. I know this for a fact because I’ve witnessed it with new investors and I’ve had to convince them to snap out of it.

You see, when the floodgates open, this is your chance to get-rich-quick. You never know when you will “cool down” so you need to take advantage of every deal that comes your way. I don’t care if you have to work 80 hours per week and seven days per week. While you have the magic touch you need to milk it for all it’s worth.

Do You Know When to Take a Vacation'

And when I say milk it for everything I mean it. These days I get the majority of my deals from referrals. Often I will get my referrals from people who are too overwhelmed or uneducated and they don’t know how to handle everything or they don’t want to work a little extra to make more money. Just the other day I got a call from an investor who was going on vacation and wanted me to handle some deals for him. Can you believe that' He is passing off thousands of dollars to me at a time when he is “hot” to go on vacation (I know this investor personally and he’s moving and shaking right now).

So what do you do when you “catch fire”' Well, take it one deal at a time and get organized. First, get a folder for each deal that you’re working on. Next, get out your calendar. There are seven days in a week, so that means you could have seven meetings with sellers each week (Yes, seven meetings. You have to temporarily sacrifice now, if you want the good life in the future). Also, if you don’t understand a deal don’t forget to call upon your network of more experienced investors to help you out (I wouldn’t try and involve them in the deals, just pick their brains for information).

Don’t Squander Opportunities

Listen: I don’t know how many other ways I can say it. But when you get in the groove, don’t let anything stop you. You might close 15 deals in two months and then it could be another three months until you get your next deal. And that’s when you take your vacation or relax…when things are slow.

I guess it just ticks me off to see people squander opportunities, or to be too lazy to take advantage of them. So, when your “hot period” happens just roll with it, with everything you got. And don’t be stupid and take a vacation, or cancel a meeting with a seller because it’s your bowling league night…

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Most People Don’t Take Advantage of Getting Rich Quick…Will You'

No fewer than three times in the past week I heard someone use the expression “when life hands you a lemon, make lemonade.” Twice it was used in the context of real estate and the other in reference to the economy in general. What that says to me is that people have, for the most part, come to the realization that things will never return to the way they were.

image via Flikr

 Last week I discussed revisiting your business plan, getting back to basics, and remembering why you went into this business in the first place (article). Often that is easier said than done. Everyone understands that there are going to be setbacks, or lemons, along the way. But now it seems as if the lemon harvest has been a bumper crop. How much lemonade can we drink'

The Carnegie Solution

I remember reading a book by Dale Carnegie many years ago. He had a fairly simple process for dealing with problems and it’s one that I’ve always remembered. He suggested following three simple steps:

People have a tendency to let things get out of hand by ignoring problems altogether. The worry and stress impacts every area of your life including your business, family life and your health. Stress takes an enormous toll and there is certainly no shortage of it today.

Facing Trouble Head On

Let’s look at a typical problem facing real estate investors. Tyler Tycoon gets caught up in the buying frenzy of a few years ago. He purchases an investment property in 2005 using an Option ARM and very little money down. He rents the property for enough to cover the teaser rate on the loan with very little left over to cover other expenses. He isn’t worried because prices are appreciating rapidly and he was assured that he would easily be able to refinance into a better loan before the teaser rate resets and caused the payments to jump by 50%. What could go wrong'

It’s now 2009 and prices have dropped significantly from the purchase price. Worse yet, the teaser rate is about to reset to a rate that will cause the payment to jump to a point that puts the payment much higher than the rental income, never mind the other expenses. Tyler has no reserves and is faced with foreclosure and is considering just walking away from the property.

Using the three step process:

Ignoring problems won’t make them go away but it can make them worse. Those who prefer to cry over spilt milk will, no doubt, be signing the blues for a long time to come. Those who choose to make lemonade out of life’s lemons will wind up whistling a happier tune.

“When we have accepted the worst, we have nothing more to lose. And that automatically means- we have everything to gain!” - Dale Carnegie

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Making Lemonade

When landlords sit down with prospective tenants, they typically say something like this:

'You're signing a one-year lease.  This is a contract for you to pay $9000 in 12 monthly installments for the use of the apartment.  In other words, it's a one-year commitment.  You are responsible for the entire amount, even if you leave before the year is up.  If you don't pay the full amount, your credit will be affected and you'll have trouble borrowing money or renting another apartment in the future.

'Are we clear''

'Yes, of course I understand,' says the prospective tenant.  But he may be thinking: blah blah blah.

Prospects don't pay attention to the 'commitment' speech because many landlords don't follow up on their threats.  If a tenant splits before the lease is up, too often the landlord simply lets him go with no followup ' even if the tenant is already behind on his rent payments.  I've been guilty of this many times myself.

However, we have the same rights as any other businesspeople to enforce our contracts.  We can use collection agencies and the courts, get judgments against deadbeats, and report them to credit bureaus.

How to do it

If you don't know how to arrange a court-ordered eviction, learn now so you'll be ready.  The laws are different in every state and even in many cities.  Not only that, if you screw up the procedure, all your efforts may be in vain.  Here's an example: in New Hampshire, there are two documents: the Demand for Rent and the Notice to Quit.  The first says 'you have to pay the rent.'  The second says, 'you have to go.'  The state requires that you give the tenant the Demand for Rent first.

However, often a late tenant is impossible to find, so instead you can post the notices on the door.  Here's where things get weird.  The Demand for Rent must be posted on the upper left of the door.  The Notice to Quit must be posted below it and to the right.  The idea is that since people typically read left to right and up to down, the tenant will see the Demand for Rent first, and the Notice to Quit second.

That's how things work in New Hampshire.  I have no idea how things work in, say, Minneapolis, so if I ever buy property there, I'll get in touch with a Minneapolis real estate attorney first.

Collection agencies and credit reporting have their own set of rules.  We cannot submit information to credit reporting agencies such as Equifax ourselves; the information must be submitted by a licensed collection agency or a court.  In either case, you will incur costs.

With a collection agency, you pay either a flat fee or a percentage of the debt owed on contingency (only if they collect).  You must submit documentation such as the lease and any written attempts to collect.  To get a legal judgment from a court, you will again have to submit documentation.

When you shouldn't enforce the contract

There are many times when you will not insist on strict enforcement of the contract.  If your tenant isn't paying because he simply can't afford it, you may want to try the 'let's part friends' option: the tenant leaves the unit in broom-clean condition by a certain day and you will not pursue him.

Another reason not to pursue the tenant is if you haven't been an angel yourself.  Review the lease and your own behavior with the tenant.  Has your maintenance fallen short'  Could the tenant make a legitimate case that you haven't lived up to your own obligations'  If so, then pursuing him in court or through collection will probably waste your time.

Sometimes you'll let a tenant out just to be a nice guy.  I did this a few years back when my excellent tenant fell in love with a woman from Vermont.  The two got married and naturally wanted to live together ' in the Green Mountain State.  Who was I to stand in their way'

I hear they are now divorced.  Maybe I should have held Bob to his lease - it would have saved a lot of trouble later.

Image by Getty Images via Daylife

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What's a One-Year Lease Really Worth'

Reuters - The Obama administration on Wednesday expanded its foreclosure prevention efforts to help a greater number of underwater homeowners refinance their mortgages.

AP - Pending home sales rose in May for the fourth straight month, spurred by low prices and a first-time homebuyers tax credit, fresh evidence that the housing sector may be recovering.

Reuters - Pending sales of previously owned U.S. homes rose slightly in May, the fourth straight monthly gain, a real estate trade group said on Wednesday.

Reuters - U.S. mortgage applications plunged to a seven-month low last week as demand for home refinancing loans tumbled 30 percent, data from an industry group showed on Wednesday.

AP - Newfound signs of stability in the housing market could still be threatened by rising foreclosures and slow efforts to stop them, according to two reports released Tuesday.

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I just read the largest company in the United States is hiring a person with only 2.5 years of actual experience and no experience as a CEO. The funny part of that is, their experience is actually only in upper management…..wow'''' Why would such a large organization do that'

Ooops, my mistake, what I meant to say is that some citizens of the United States did exactly that with the current president.

If you wanted a great speaker, you should have elected Tony Robbins. He has real life CEO experience.

READ THIS FROM Wikipedia:

Socialism refers to a broad set of economic theories of social organization advocating public or state ownership and administration of the means of production and distribution of goods, and a society characterized by equality for all individuals, with a fair or egalitarian method of compensation. Modern socialism originated in the late 19th-century intellectual and working class political movement that criticized the effects of industrialization and private ownership on society. Though often conflated with the thought of Karl Marx, Marx merely saw socialism as a stage in the ineluctable transition from capitalism to communism.[3][4][5]

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The reigning credit crunch has disturbed the financial equilibrium of many people around the globe. Aftermath of subprime mortgage crisis was felt the world over and the housing market is yet to recuperate fully. With such a situation prevailing, there are many who successfully manage to tap the equity in their homes. It has been made possible due to reduction in the mortgage rates.

Refinancing activities increased
Statistical data indicates that the fixed rate mortgage for a 30 year loan term dropped by 1.3 points from 6.46% to 5.14% during the period October 2008. The fixed rate mortgage rates for a 15 years loan term has also registered a sharp decline from 6.19% to 4.91%.

Reports also suggest that mortgage refinance escalated by 60% during the 2nd week of December 2008 (according to Mortgage Bankers Association). The increase in mortgage refinance activity could be traced as there were marked changes in the refinance index of Mortgage Bankers Association which keeps a track of all the refinance loan applications.

Mortgage refinance has gone down well with consumers who think they are being able to save a good deal by making lower mortgage payments. The amount that the consumers are saving is being spent mostly for building up an emergency fund or to save it for the rainy day.

Eligibility criteria for mortgage refinance are still stringent
Even though consumers are trying hard to utilize their property by opting for refinancing, not all are qualifying for the same. There are 2 reasons for this. The first reason is that the norms and requirements for qualifying for refinance have been made more stringent. The second reason is that the housing values have declined drastically.

Creditors are usually giving preference to borrowers having 20% equity in their property. However, a borrower can opt for private mortgage insurance in the event he has less than 20% equity in the property.

Refinance is a good option when there are several debts that need to be settled. It is better to opt for refinancing even if the rate available is 1% less than interest rate, the homeowner is currently paying. With the bursting of the housing bubble, lenders have become very cautious and tend to disqualify any loan application that appears to be a risky deal for them.

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If the “The Root Cause Of Our Economic Problems Is The Housing Foreclosure Crisis” as Senator Dodd States, then all the bad mortgages and the $700 Billion Bailout is not necessary.

Or maybe he is ass backwards and it was Wall Street with their aggressive mortgages and the Federal Reserve who encouraged folks to go out and get adjustable rate mortgages and did not do their jobs anyway regardless of Wall Street.

Remember it is the Federal Reserve that monitors and controls the financial markets in the United States!

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Maybe Greenspan should not have raised the target rate 17 consecutive sessions after he went out and told everyone to go out an get adjustable rate mortgages.

Look that one up.

Seems like the Federal Reserve failed to do their job, again!

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The Federal Open Market Committee (FOMC) decided today to lower its target for the federal funds rate 50 basis points to 1 percent.

The pace of economic activity appears to have slowed markedly, owing importantly to a decline in consumer expenditures. Business equipment spending and industrial production have weakened in recent months, and slowing economic activity in many foreign economies is damping the prospects for U.S. exports. Moreover, the intensification of financial market turmoil is likely to exert additional restraint on spending, partly by further reducing the ability of households and businesses to obtain credit.

In light of the declines in the prices of energy and other commodities and the weaker prospects for economic activity, the Committee expects inflation to moderate in coming quarters to levels consistent with price stability.

Recent policy actions, including today's rate reduction, coordinated interest rate cuts by central banks, extraordinary liquidity measures, and official steps to strengthen financial systems, should help over time to improve credit conditions and promote a return to moderate economic growth. Nevertheless, downside risks to growth remain. The Committee will monitor economic and financial developments carefully and will act as needed to promote sustainable economic growth and price stability.

Voting for the FOMC monetary policy action was: Ben S. Bernanke, Chairman; Timothy F. Geithner, Vice Chairman; Elizabeth A. Duke; Richard W. Fisher; Donald L. Kohn; Randall S. Kroszner; Sandra Pianalto; Charles I. Plosser; Gary H. Stern; and Kevin M. Warsh.

In a related action, the Board of Governors unanimously approved a 50-basis-point decrease in the discount rate to 1-1/4 percent. In taking this action, the Board approved the requests submitted by the Boards of Directors of the Federal Reserve  Banks of Boston, New York, Cleveland, and San Francisco.

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The Federal Reserve yields enormous power over the health of the nation’s economy AP Personal Finance Editor Trevor Delaney explains how setting interest rates is one of its most powerful tools.

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Hi Friends . . . . . I’m against the $85,000,000,000.00 bailout of AIG.
Instead, I’m in favor of giving $85,000,000,000 to America in a “We Deserve It Dividend.”

To make the math simple, let’s assume there are 200,000,000 bonafide U.S. Citizens 18+.

Our population is about 301,000,000 +/- counting every man, woman and child.

So 200,000,000 might be a fair stab at adults 18 and up.

So divide 200 million adults 18+ into $85 billon that equals $425,000.00.

My plan is to give $425,000 to every person 18+ as a “We Deserve It Dividend.”

Of course, it would NOT be tax free.

So let’s assume a tax rate of 30%.

Every individual 18+ has to pay $127,500.00 in taxes. That sends $25,500,000,000 right back to Uncle Sam. But it means that every adult 18+ has $297,500.00 in their pocket. A husband and wife team has $595,000.00.

What would you do with $297,500.00 to $595,000.00 in your family'

Pay off your mortgage - housing crisis solved.

Repay college loans - what a great boost to new grads.

Put away money for college - it’ll be there.

Save in a bank - create money to loan to entrepreneurs.

Buy a new car - create jobs.

Invest in the market - capital drives growth.

Pay for your parent’s medical insurance - health care improves.

Enable Deadbeat Dads to come clean - or else.

Remember this is for every adult U S Citizen 18+ including the folks who lost their jobs at Lehman Brothers and every other company that is cutting back. And, of course, for those serving in our Armed Forces.

If we’re going to re-distribute wealth let’s really do it…we’re going to do a $85 billion bailout, let’s bail out every adult US Citizen 18+!

As for AIG - liquidate it. Sell off its parts.
Let American General go back to being American General. Sell off the real estate.
Let the private sector bargain hunters cut it up and clean it up.
Here’s my rationale. We deserve it and AIG doesn’t.

Sure it’s a crazy idea that can “never work.”
But can you imagine the Coast-To-Coast Block Party! How do you spell Economic Boom'
I trust my fellow adult Americans to know how to use the $85 Billion “We Deserve It Dividend” more than do the geniuses at AIG or in Washington DC.

And remember, This plan only really costs $59.5 Billion because $25.5 Billion is returned instantly in taxes to Uncle Sam.

Ahhh…I feel so much better getting that off my chest.

Kindest personal regards, Birk

T. J. Birkenmeier, A Creative Guy & Citizen of the Republic.

PS: Feel free to pass this along to your pals as it’s either good for a
laugh or a tear or a very sobering thought on how to best use $85
Billion!!

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Wells Fargo & Company (NYSE:WFC) and Wachovia Corporation (NYSE:WB) said today they have signed a definitive agreement for the merger of the two companies including all of Wachovia’s banking operations in a whole company transaction requiring no financial assistance from the Federal Deposit Insurance Corporation (FDIC) or any other government agency.

Under the agreement, Wells Fargo will acquire all outstanding shares of common stock of Wachovia in a stock-for-stock transaction. In the transaction, Wells Fargo will acquire all of Wachovia Corporation and all its businesses and obligations, including its preferred equity and indebtedness, and all its banking deposits.

Under terms of the agreement, which has been approved unanimously by the boards of both companies, Wachovia shareholders will receive 0.1991 shares of Wells Fargo common stock in exchange for each share of Wachovia common stock. The transaction, based on Wells Fargo’s closing stock price of $35.16 on October 2, 2008, is valued at $7.00 per Wachovia common share for a total transaction value of approximately $15.1 billion. Wachovia has almost 2.2 billion common shares outstanding. The agreement requires the approval of Wachovia shareholders and customary approvals of regulators.

Wells Fargo will record Wachovia’s credit-impaired assets at fair value. The acquisition is expected to exceed Wells Fargo’s internal rate of return goal and add to Wells Fargo’s earnings per share in the first year of operations, excluding integration costs, write-downs, transaction charges, and credit reserve build. Wells Fargo expects to incur merger and integration charges of approximately $10 billion. To maintain its strong capital position, Wells Fargo intends to issue up to $20 billion of new Wells Fargo securities, primarily common stock.

“We at Wachovia have great admiration and respect for the people and businesses at Wells Fargo and we are extremely pleased to join forces with this outstanding company,” said Robert K. Steel, President and CEO of Wachovia Corp. “Today’s announcement creates one of the strongest financial firms in the world and is great for all Wachovia constituencies: our shareholders, customers, colleagues and communities. This deal enables us to keep Wachovia intact and preserve the value of an integrated company, without government support. The market presence and composition of our businesses, along with our service-oriented cultures, are extraordinarily complementary and this combination creates great potential for sustained stability and growth.”

“This agreement represents a compelling value for Wachovia shareholders,” said Wells Fargo Chairman Dick Kovacevich. “It provides superior value compared to the previous offer to acquire only the banking operations of the company and because Wachovia shareholders will have a meaningful opportunity to participate in the growth and success of a combined Wachovia-Wells Fargo that will be one of the world’s great financial services companies. We are combining the industry’s number one ranking customer service culture of Wachovia with the industry’s number one sales and cross-selling culture of Wells Fargo. The best in service and the best in sales, an unbeatable combination. Wachovia shareholders also will benefit from holding the stock of a strong financial institution, the U.S. bank with the highest credit ratings and with a long history of increasing dividends on its common stock. Wachovia’s brokerage and asset management businesses, which would have been left behind in the prior proposal, are tightly interwoven with Wachovia’s core banking business - and this agreement avoids the complexity and unavoidable loss of value in trying to separate them, which would have disrupted Wachovia’s team members and customers. We also bring to this merger agreement our 157 years of experience in financial services and the unparalleled convenience we can offer Wachovia customers through one of the most extensive financial services distributions systems in North America. We have the highest regard for the quality and commitment and caring of Wachovia team members. We believe their demonstrated commitment to outstanding customer service and their highest standards of community leadership are identical to our own values. And, of course, this agreement won’t require even a penny from the FDIC.”

The combined company will have a strong presence in Charlotte, which will be the headquarters for the combined company’s East Coast retail and commercial and corporate banking business. St. Louis will remain the headquarters of Wachovia Securities. In addition, three members of the Wachovia Board will be invited to join the Wells Fargo & Company Board when the transaction is completed.

Kovacevich said, “This agreement is an outstanding opportunity for Wachovia common and preferred shareholders and debt holders, team members and customers, for the Charlotte and St. Louis communities and indeed all of the communities that Wachovia serves, and for the U.S. government and our banking system. It makes compelling business and strategic sense and is simply an incredible fit that will result in an immensely strong, stable financial services company that will carry on Wachovia’s proud tradition of being one of the very best financial institutions in the world.”

“We know this has been a time of great uncertainty for Wachovia team members and many of its customers as their company has gone through a very painful and challenging time of unprecedented change in our industry,” said Wells Fargo President and CEO John Stumpf. “We want to assure them we’ll do everything we can to make the integration of our operations as smooth as possible. An important measure of success for this integration will be our ability to retain as many of the talented Wachovia team members as possible so they can continue to provide outstanding service and financial advice to their customers and continue their careers with Wells Fargo.”

The combined company will be one of North America’s most extensive financial services distribution networks:

6/30/08                                                      

Wells Fargo Wachovia Combined
Assets Trillion $609 billion $812 billion $1.42 Deposits $339 billion $448 bllion  $787 billion Customers  28 million 20 million 48 million (1) Assets Under Mgt. (Mutual Funds) $151 billion  $107 billion  $258 billion Stores  5,941 4,820  10,761 ATMs 6,950  5,277  12,227 Team Members  160,000 120,000 280,000

(1) unadjusted for customer overlap

Wells Fargo’s Chief Financial Officer Howard Atkins said Wells Fargo used conservative assumptions in evaluating this opportunity. “As always, we only consider acquisitions that add to earnings per share no later than the third year after purchase and earn an internal rate of return of at least 15 percent,” said Atkins. “This acquisition comfortably exceeds all our financial requirements. This is a unique opportunity to expand both our Community Banking and Wholesale Banking presence in current markets and enter some new markets by acquiring another full service financial services retail banking company with a strong culture of customer service and community involvement very similar to ours.”

Wells Fargo and Wachovia will create the nation’s premier coast-to-coast community banking presence. The combined company will have community banks in 39 states and the District of Columbia. The acquisition will establish a Wells Fargo Community Banking presence for the first time in Alabama, Connecticut, Delaware, Florida, Georgia, Kansas, Maryland, Mississippi, New Jersey, New York, North Carolina, Pennsylvania, South Carolina, Tennessee, Virginia and Washington, D.C. Wells Fargo already has a Community Banking presence in Alaska, Arizona, Arkansas (pending), California, Colorado, Idaho, Illinois, Indiana, Iowa, Michigan, Minnesota, Montana, Nebraska, Nevada, New Mexico, North Dakota, Ohio, Oregon, South Dakota, Texas, Utah, Washington, Wisconsin, and Wyoming.

The combined company will be #1 in deposit market share(2) in 17 of its 39 Community Banking states: Alaska, Arizona, California, Colorado, Florida, Georgia, Idaho, Minnesota, Iowa, Montana, Nebraska, New Jersey, New Mexico, North Carolina, South Dakota, Texas, and Virginia. Ninety-three percent of its deposits will be in states in which it ranks #1, 2 or 3 and the combined company will rank #1 in ten of the nation’s 20 largest Metropolitan Statistical Areas (MSAs) in deposit market share.(2)

(2) excludes deposits greater than $500 million in a single banking store Wells Fargo also is the nation’s:

#1 small business lender
#1 agricultural lender
#1 commercial real estate broker
#2 largest mortgage originator
#2 largest mortgage servicer
#2 largest debit card issuer
#1 financial services provider to middle market businesses in the western U.S. and a national presence in commercial banking (29 states) largest bank-owned U.S. insurance brokerage In connection with the agreement, Wachovia and Wells Fargo entered into a share exchange agreement under which Wachovia is issuing Wells Fargo preferred stock that votes as a single class with Wachovia’s common stock representing 39.9 percent of Wachovia’s voting power.

Wells Fargo was advised on the transaction by Wachtell, Lipton, Rosen & Katz and JPMorgan Securities, Inc. was the exclusive financial advisor to Wells Fargo. Wachovia was advised on the transaction by Sullivan & Cromwell LLP, Goldman Sachs & Co. and Perella Weinberg Partners.

Wells Fargo & Company is a diversified financial services company with $609 billion in assets, providing banking, insurance, investments, mortgage and consumer finance through almost 6,000 stores and the internet (wellsfargo.com) across North America and elsewhere internationally. Wells Fargo Bank, N.A. is the only bank in the U.S., and one of only two banks worldwide, to have the highest possible credit rating from both Moody’s Investors Service, “Aaa,” and Standard & Poor’s Ratings Services, “AAA.”

FORWARD-LOOKING STATEMENTS

This news release contains forward-looking statements about Wells Fargo and Wachovia and the proposed transaction between the companies. There are several factors - many beyond Wells Fargo’s control - that could cause actual results to differ significantly from expectations described in the forward-looking statements. Among these factors are the receipt of necessary regulatory approvals and the approval of Wachovia shareholders. Forward-looking statements speak only as of the date they are made, and we do not undertake any obligation to update them to reflect changes that occur after that date.

For a discussion of factors that may cause actual results to differ from expectations, refer to each company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2008, and Annual Report on Form 10-K for the year ended December 31, 2007, including information incorporated into each company’s 10-K from their respective 2007 annual reports, filed with the Securities and Exchange Commission (SEC) and available on the SEC’s website at http://www.sec.gov/'.

MORE INFORMATION ABOUT THE MERGER AND WHERE TO FIND IT The proposed merger will be submitted to Wachovia Corporation shareholders for their consideration. Wells Fargo will file with the Securities and Exchange Commission (”SEC”) a registration statement on Form S-4 that will include a proxy statement of Wachovia Corporation that also constitutes a prospectus of Wells Fargo. Wachovia Corporation will mail the proxy statement-prospectus to its shareholders. Wachovia shareholders and other investors are urged to read the final proxy statement-prospectus when it becomes available because it will describe the proposed merger and contain other important information. You may obtain copies of all documents filed with the SEC regarding the proposed merger, free of charge, at the SEC’s website (http://www.sec.gov/'). You may also obtain free copies of these documents by contacting Wells Fargo or Wachovia, as follows:

Wells Fargo & Company, Attention Corporate Secretary, MAC N9305-173, Sixth and Marquette, Minneapolis, Minnesota 55479, (612) 667-0087.

Wachovia Corporation, Investor Relations, One Wachovia Center, 301 South College Street, Charlotte, North Carolina 28288, (704) 374-6782

Wells Fargo and Wachovia and their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from Wachovia Corporation shareholders in connection with the proposed merger. Information about Wells Fargo’s directors and executive officers and their ownership of Wells Fargo common stock is contained in the definitive proxy statement for Wells Fargo’s 2008 annual meeting of stockholders, as filed by Wells Fargo with the SEC on Schedule 14A on March 17, 2008. Information about Wachovia’s directors and executive officers and their ownership of Wachovia common stock is contained in the definitive proxy statement for Wachovia’s 2008 annual meeting of shareholders, as filed by Wachovia with the SEC on Schedule 14A on March 10, 2008. You may obtain a free copy of these documents by contacting Wells Fargo or Wachovia at the contact information provided above. The proxy statement-prospectus for the proposed merger will provide more information about participants in the solicitation of proxies from Wachovia Corporation shareholders.

CONFERENCE CALL UPDATE
Wells Fargo will host a conference call Friday, October 3, 2008, at 6:30 a.m. (Pacific Time) to review the acquisition. Investors can call 877-425-9480 (domestic) and (210) 689-8848 (international) with the access code 299254, or listen via live audio webcast. The live audio webcast and presentation visuals will be available on http://www.wellsfargo.com/invest_relations/presents'. A replay of the conference call will be available through October 10, 2008 at (877) 660-6853 (domestic) and (201) 612-7415 (international). Enter account 286 and Conference ID 299254. The replay also will be available online.

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Speaking before the Senate Banking Committee, SEC Chairman Christopher Cox said commercial banks and broker dealers who sold subprime mortgage backed securities are also being looked at.

“We are investigating whether mortgage lenders properly accounted for the loans in their portfolios, and whether they established appropriate loan loss reserves,” he told the committee.

The Securities and Exchange Commission revealed Tuesday that it has 50 pending subprime related investigations involving residential lenders, investment banking firms, credit rating agencies, and other players involved in the securitization process.

The agency, which is responsible for overseeing bond disclosures on publicly registered securities, said it is investigating whether lenders adequately disclosed the risk profiles of the mortgages they were securitizing.

In late 2006 Lewis S. Ranieri, the co-inventor of the MBS, criticized the SEC in a speech at the National Press Club, saying the agency needs to play a central role in forcing issuers to increase disclosures on bonds collateralized by nontraditional residential loans. At the time, Mr. Ranieri told National Mortgage News that “this isn’t an indictment of the SEC,” but added that “the transparencies are not what they should be.”

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Marc Faber said on CNBC on Tuesday that the best (solution) is to let the crisis burn itself out and clean the system, even with pain for people on Wall Street, and the banning short sellers won’t solve anything.

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A simple guide explaining how the Federal Reserve, the central bank of the United States that is responsible for regulating the supply of money in the US economy, has created the recession the US economy is experiencing.

From our friends at http://www.kidmercuryblog.com

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House Republicans slam steps to alleviate crisis as ‘bailout mania’; Bunning introduces legislation challenging Fed’s authority; Bunning says recent actions remind him of China, Venezuela; AIG gets $85 Billion Fed loan, Cedes control to government; Fannie/Freddie takeover could cost $200 Billion; Analysis by Sen. Jim Bunning, (R) Kentucky

Transcript:
>> we should not bail out everybody. >> i think chris cox has done a terrific job. >> we cannot have a situation where you expect this taxpayer to foot the bill when times are bad. >> they are in limbo right now. >>> some of the harshest criticism of the armored and seek action by the fed and treasury to stabilize the financial markets has come within the president’s own party. jim bunning has been among the most vocal critics, introduced legislation yesterday to keep the fed from injecting more money into other companies in the future. good to see you, senator. we were talking about your concerns about the takeover of fannie mae and freddie mac, i concerns — i assume that your to intervene in just certain cases, or will they intervene constantly' who did they pick and choose to win, who they pick and choose to lose' it is an unbelievable situation we find ourselves in. >> as a republican free-market are on the hill, and i know there are a few up there, do you feel betrayed' >> i feel less certain about those three market republicans — free-market republicans around me. >> the me ask you specifically about the aig. are there any exceptions to your role' the treasury secretary, fed chairman ed apparently made the case to some colleagues in the senate and house, aig was too interconnected to fail, a much greater risk to the wider economy if you let it go under. how much more chaos have the fed chairman and treasury secretary brought to the market by what they have done it' who did they pick and choose' what is next' chrysler, ford, general motors' they’re all here with their hand out, united airlines, delta air lines. u.s. airlines. it will all be here with their hand out. this is not a free market that we are in. this is france, 20 years ago, and the french even said, please, get us out of here, we do not want this. this is not good individual initiative. this is not good for america. this is not good for my family. this is not good for main street america. tell me one person who that helped. >> let me ask you about another issue, even as we talk about the aig takeover, senator Schumer was talking about it, that perhaps the federal government was misled, creating this idea of creating federal intervention with the creation of resolution trust corp. and apple the savings and loan cris, something to help purchase distressed that, or riches and a comprehensive solution — mortgages and a comprehensive solution. >> i was here when we created the resolution trust corp. i was in the house banking committee at the time, and believe me, i fought it until the very last. wright, the speaker of the house, has forced to under 40- some savings and loans down the tubes, and he was resisting any assistance by the federal government. i do not want to create an entity in the federal government that just bails out those who fail. we have a system in our country that rewards those who are successful. what happens to those banks that have worked their bottoms off to be successful, and follow the rules' do we take their success and punish them by buying off all the bad loans from those who are failing' no! > would you be willing to risk a recession to stick to your principles' >> risk a recession' > that may be true or may not be true. but the way we are going right now, peter, we’re going deeper into recession if we follow the policies of ben bernanke and henry paulson. >> that me ask you about another regulator in the news, and that is christopher cox. you are a member of the banking

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