quick story about banking

I have an uncle that is a segnificant executive in a local bank. His 3 sons are in banking. Over the holidays I managed a discussion about banking with him.

To start off with one of his sons worked for Wachovia, as the crisis loomed he not only had his shares in the bank still in the bank. He also dumped his entire 401 k into Wachovia, to see it all go down the toilet.

I suggested that the future of banking was the local bank, and that the "money center" was dead, and the Ibank. My Uncle then talked about how JPM and WFC were in trouble because they had been aquiring the distressed assets. And how well positioned his bank was to become the next "Big Bank".

I of course, bit my tounge and didn't mention to him that in an economic contraction it's those that are in a position to pick up the distressed assets, and not those selling them under distress that would have the stronger future. Not noting that his bank had sold off 20 some odd branches a few months ago.

I just wanted to share the idea that some of the second tier banks think that they are going to become the next Citi. As opposed to the model for banking having a change.