Refinancing Blues for the Banks

Yesterday, I wrote about Wachovia's recent asset sales and lest we forget why it desparately needs capital, Bloomberg reminds us in "Merrill, Wachovia Hit With Record Refinancing Bill." Immobilienblasen (one of my favorite European economic bloggers) writes that "Not Only Homeowners are Having Refinancing Problems" and goes on to state:

As many banks compete for funds to pay off their borrowings, or sell assets to raise cash, their actions could exacerbate strains in financial markets. Banks that turn to shorter-term loans will have to renew their borrowings more frequently, increasing the risk that they won't be able to get money when they need it.

The Wall Street Journal notes in "New Credit Hurdle Looms for Banks" that Wachovia has indicated that said "that 55% of the bank's balance sheet is funded by core deposits and that the bank has the ability to 'seamlessly handle the refinancing of short-term debt maturities as a result of our prudent liquidity planning.'"

We know that Wachovia is selling assets and raising cash, and now indicating it will use customer deposits to shore up its short-term, credit obligations. Does that sound like prudent liquidity planning?