At least good news for taxpayers… CitiGroup has backed out of talks for Wachovia leaving the entire deal for Wells Fargo. I’m guessing that after more of the depth of bad debt came to light, it became more and more obvious that the deal just was not longer going to be in the best interest of CitiGroup’s stockholders.
That was the good news, as long as Wells Fargo can consumate the deal without government assistance. CitiGroup apparently still plans to pursue legal remedies against Wells and Wachovia.
In the bad news column, today was day seven of overall down market results. Some analysts are starting to say what I’ve been saying for some time now: government can’t fix this, and having the government try to fix …
After a weekend of back and forth, one judge’s order to stop Wells and Wachovia from proceeding on Saturday, and appellate court overturning that order on Sunday, and a $60 Million CitiGroup (C) suit against both Wells Fargo (WFC) and Wachovia (WB), the three parties have agreed to a temporary halt to all litigation and discovery until Wednesday at noon.
Which just demonstrates the fallout that can be expected as the government (in this case, the FDIC) strong-arms companies to act, no matter how imprudently, to prevent the government from stepping in and (in this case) taking yet another bank into receivership.
One could argue that FDIC is just plain embarrassed that events ever got to this point. Or …
It probably comes as no big surprise that Wells Fargo (WFC), one of the largest banking concerns in the US, well diversified in financial products across deposits, lending, credit cards, sales finance, and a smart mortgage originator, announced Friday that they had made a deal to purchase the entire Wachovia package for $15.4 Billion. The surprise comes with the fact it was five days late. The deal undercuts CitiGroup’s (C) announced purchased of part of the Wachovia (WB) operation, and does what CitiGroup could not do: completes the deal without Federal Funding.
I was shocked when I heard, since Wells had originally participated in negotiations last weekend along with CitiGroup. Wells evidently was able to use the week, in …
No visible means of support and you have not seen nuthin yet
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The House of Representatives today passed the Senate version of the $700 Billion Bail-out. For now, it’s over. Bush signed the bill shortly after the vote, and we have not seen nuthin yet.
In case you haven’t noticed yet, the market is not exactly tripping over itself to show its appreciation. After the announcement of the bill passage, the Dow lost all of the 200 or so points it had gained today, and then some.
I haven’t even had time to read the bill yet, but have heard so far that there’s some pork. It shouldn’t surprise me that our Congress, while debating the bill most …