Friday, September 26, 2008 at 2:04 PM
Shares of National City fell sharply today--at one point losing half their value. The stock recovered somewhat to close down about 25%. Wall Street fears National City and banks like Wachovia could be at risk after the failure and sale of Washington Mutual. ideastream®'s Dan Bobkoff reports that the fear might be overblown.
After Washington Mutual became the nation's biggest bank failure ever, investors punished other banks seen as vulnerable. National City is trying to come out from under big mortgage losses.
But Spokesperson Kristen Baird Adams says National City is very different from WaMu, and in a much stronger financial position.
ADAMS: Any speculation regarding the failure of National City is ridiculous.
Bill Mahnic, a finance professor at Case Western Reserve University, believes the drop in National City is based more on emotion than an analysis of the bank's fundamentals.
MAHNIC: The market has got a lot of emotion in it and sometimes people don't act rationally. They act because of fear.
Mahnic says Wachovia is much more likely than National City to merge or fail in the coming weeks.