It's the loans, not the deposits

Implications: Sometimes you don't want to get what you've been hoping for.  Wachovia has a top deposit gathering franchise, and they clearly help complete much of the Wells Fargo footprint.

Analysis: The problem, obviously, is dealing with the $120 billion portfolio of pay option arm mortgages.  Yes, there will be tax benefits avaulable that might not hsave been there before, but this will be at a huge cost and a huge distraction.Finally, Wells' reputation on M&A has been entirely built around small deals, most of them very small.  Take a look - they have soecialzied in buying $100-300 million banks. The skills needed in those deals may be applicable to buying Wachovia - but they might not.