New Orleans In my dealings with them over the years I have found HSBC to be a fascinating company with some wild extremes and some very redeeming qualities as well. Floyd Norris of the Times noted the end of an era with the bull’s-eye shot on the acquisition of Household Finance by HSBC only 7 short years ago. When I was working with ACORN we had mixed feelings on the deal then. On one hand it helped us settle our campaign with Household, we felt, and that was a good thing. On the other hand, we directly warned HSBC that they would be making a tragic error if they kept CEO Aldrich and his gang, because they just couldn’t help themselves. They didn’t listen. This is one of those rare situations in which we said then, and can say now, “We told you so.” Seeing a quote from the now bankrupt and vanquished New Century from that time also brings back all of the pain and the forebodings for the future that have become too sadly prescient. High & Low Finance The Deal That Fueled Subprime By FLOYD NORRIS Published: March 5, 2009 There are times when a corporate takeover has importance far beyond the companies involved. Richard Cannon/Bloomberg News In 2002, John Bond of HSBC announced it would buy Household. Mike Clarke/Agence France-Presse — Getty Images On Monday, the HSBC chief Michael Geoghegan said: “This is an acquisition we wish we had not undertaken.” The 2002 agreement for HSBC, the London-based international bank, to buy the biggest American finance company, Household International, seemed at the time to be such a merger. And it was. The merger established that lending to subprime customers was a respectable business. Finance companies like Household and its corporate sister, Beneficial, had long had slightly disreputable reputations. They lent money to homeowners who could not get financing from normal banks, and they engaged in collection methods that might seem aggressive to more timid financiers. Not long before the merger, Household had agreed to pay $484 million to settle claims it was a predatory lender. Its borrowing costs had risen and its stock was at a seven-year low. “This sector’s been beat up on a regular basis,” said Robert K. Cole, the chairman and chief executive of New Century Financial, then a fast-rising subprime lender. “So it’s refreshing when a highly qualified suitor sees value.” This week, HSBC conceded defeat. It will close the remaining 800 offices of Beneficial and Household Financial, and it will stop making loans. “With the benefit of hindsight, this is an acquisition we wish we had not undertaken,” Michael F. Geoghegan, HSBC’s chief executive, understated.