Wachovia's decision to buy Golden West Financial for $24.5 billion back in May 2006 was controversial from the start. Even then, shareholders were convinced that Wachovia was hideously overpaying. Wachovia was smitten by the heady growth in option ARMs, which Golden West was built on. We know how this turned out. Some have traced the implosion of Wachovia back to this deal.

Golden West's Herb and Marion Sandler cashed out at the peak--they deserve some credit for that. They found their sucker. The raked in $2.3 billion in cash and Wachovia stock, which we can only hope they sold quickly. They are anything but apologetic. They have even developed a website to defend Golden West. They did offer much longer periods before resets, for one thing. And they kept all their loans, refusing to sell them to the securitizers. They may have some decent points here. As time went on, Option ARMs turned much more punitive. 

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