Wachovia made a play for captain of the failboat, posting an impressive $23.9b Q3 loss.  Twenty-three-point-nine billion dollars, lost.  In a quarter.  That’s three months.  Wachovia lost $265,555,555 a day in the last quarter, or $184,413 every minute.  All that can really be done at this point is congratulating Wachovia for this staggering achievement.

(Warning: Boring technical content ahead)

The loss included over $18b in a “goodwill” writedown.  When a company is bought, as Wachovia is in the middle of right now, a purchase price is given.  That number is then divided up among the company’s various components.  Often, the valuation of a component will exceed its current value – if the company’s assets were worth what they said they were, the company likely would not have been bought.  That difference, combined with the differences from the other business components, is lumped together and written down all at once in what’s called a goowdill writedown.  In this case, Wells won’t be buying up a bunch of bloated assets; it will be buying up a bunch of assets valued at close to their current worth.  In time, as those assets appreciate, that appreciation will be booked as profit.  Writedowns are now required by law to be recorded all at once, rather than amortized over a period of decades, so they really do look a lot worse than they actually are.  It’s still bad, though.

Companies are required to go through the goodwill process annually, but since such leeway is given in the valuation of assets, goodwill writedowns are usually very small, if they exist at all.  About the only time a company can get a solid real-world valuation of its assets is when it’s being bought.

So realistically, aside from the giant writedown, Wachovia’s losses were still just north of $4b for the quarter, still way more than the roughly $600m that analysts were expecting, and surely enough to make Citi think it ultimately won in the fight with Wells Fargo.