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Citigroup to Buy Wachovia's Banking Operations

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posted on Sep, 29 2008 @ 07:39 AM
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The government says Citigroup will acquire the banking operations of Wachovia in a deal facilitated by the Federal Deposit Insurance Corp.

Wachovia
Chuck Burton / AP
The FDIC says Wachovia [WB 10.00 --- UNCH (0) ] didn't fail, and that all depositors are protected and there will be no cost to the Deposit Insurance Fund.

The sale of Wachovia comes just days after the government's seizure of Seattle-based Washington Mutual Inc. -- the largest bank failure in U.S. history.


Well duh duh duh another one bites the dust....call this what it is and this is another bank bites the dust. So now we get 5 banks to choose from Wells Fargo, Citi, Bank of America, JP Morgan, and Goldman Sachs. To top this all off we get to give these guys 700 billion dollars to have the honor of borrowing money from them...at interest not to mention.




posted on Sep, 29 2008 @ 08:57 AM
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Looks like a part of the bill is saying, in regards to the toxic paper that is going to be sold to the .gov , that the .gov will not pay more than the institution selling it to the .gov bought it for except in cases of buyouts or mergers. So it looks like C and JPM will sell any toxic paper from Wachovia and WaMu respectively at a profit to the government. Hence the rapid canibalization of two of the largest US thrifts.

I'm not saying WaMu and Wachovia were in good shape, I'm just saying that the takedown of both of these over what a 5 day period, shows that the "favored few" knew that they'd be able to cannibalize these banks and pass the bad debt on to the taxpayer at a handy profit.

It's looking like the favored few are these banks: JPMorgan/chase (JPM), Bank of America (BAC), Cititgroup (C) are definately on the Favored List I also think Goldman Sachs is there too and maybe Morgan Stanley (MS).

So where does that leave some of the larger non favored institutions? Will similar events happen to them as they are gobbled up by the favored? Of most interest are: Wells Fargo (WFC), US Bancorp (USB), and Suntrust (STI).

Goldman and Morgan Stanley since they have recieved permission to be bank holding companies will most likely need to acquire a bank with brick and mortar location. With Buffet buying in to GS (and talking his book with his support for the bailout BTW) I'd think that GS may acquire Wells or USB given Buffet's stakes in those institutions.



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