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10-03-2008, 08:47 AM
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Location: Charlotte, North Carolina
5,137 posts, read 9,630,747 times
Reputation: 933
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Citibank vs Wachovia/Wells Fargo...in court!
Looks like this wont be over for a while
Citigroup accuses Wachovia of 'breach' - * HP | Right Headlines | Map - Charlotte Observer (http://www.charlotteobserver.com/112/story/229694.html - broken link)
I can only imagine that the judge will force Wachovia to sell itself to Citibank
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10-03-2008, 08:49 AM
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509 posts, read 1,031,193 times
Reputation: 173
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Saw this one coming... it's going to get nasty.
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10-03-2008, 08:51 AM
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Location: West Cardassia, NC
2,374 posts, read 3,164,789 times
Reputation: 1073
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Quote:
Originally Posted by renriq02
Looks like this wont be over for a while
Citigroup accuses Wachovia of 'breach' - * HP | Right Headlines | Map - Charlotte Observer (http://www.charlotteobserver.com/112/story/229694.html - broken link)
I can only imagine that the judge will force Wachovia to sell itself to Citibank
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It looks like someone in Wachovia forgot to read the fine print when they were signing all those documents!  |
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10-03-2008, 09:12 AM
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Location: Yellow Brick Road
31,179 posts, read 32,002,621 times
Reputation: 12742
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No, this is not the problem it appears to be, IMHO. The Feds forced Wachovia to make a deal as they were going to seize them and shut them down. So then CITI stepped in and was going to use this as an opportunity to take advantage of bail out money to dump bad debt on Uncle Sam.
Once the SEC changed its guidelines on marking to market - value vs. fair value - this gave Wachovia a chance to work on their spreadsheets. And the Feds don't want to have to assume the bad debt that CITI was gonna dump on them as part of this deal. So I just don't see the Feds allowing the CITI deal to go thru/. I suspect Lehman could have been saved had the SEC changed their guidelines earlier and that is what makes me sick. Instead of trying to mitigate the "credit crisis" w/ some innovative strategies, Paulson's solution of dumping money into the system struck many of us as a bandaid that still was not going to really remediate the underlying marketing conditions (how we got to this point).
The truth is still not being told, altho I am noticing that some of the financial programs on TV are explaining things in more depth now . . . Most people do NOT understand the debacle w/ Fannie creating these toxic securities . . . and the assumption that buying them meant no probs since they were federally backed. Oh, I could go on and on but my point is . . . I believe the Feds see it is much to their advantage to back the Wach/WF deal, wh/ does not include having to back bad loans wh/ would have been written off w/ the CITI deal.
Last edited by anifani821; 10-03-2008 at 09:57 AM..
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10-03-2008, 09:15 AM
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Location: Charlotte, North Carolina
5,137 posts, read 9,630,747 times
Reputation: 933
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It would be better for Wells to buy Wachovia for many reasons.
Citi would probably shut down a lot of branches.
Wells will more than likely expand or leave everything the same.
I'm hoping that Wells does buy so I can get an account there.  |
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10-03-2008, 09:17 AM
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Location: Huntersville
1,521 posts, read 2,756,595 times
Reputation: 275
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Either way when we the benefits get dropped from Wachovia I'm going to suntrust!
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10-03-2008, 10:31 AM
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Location: Findlay, OH
632 posts, read 1,300,195 times
Reputation: 302
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This reminds me of the Merchant of Venice. It appears Citibank is demanding its pound of flesh. If there is a Portia in Charlotte, please speak up now.
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10-03-2008, 10:34 AM
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Location: West, Southwest, East & Northeast
3,446 posts, read 3,860,808 times
Reputation: 823
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Bob Steele, WB CEO, has a fudiciary responsibility to take the best deal for his shareholders. That is a CEO's number one responsibility - its shareholders.
If the Fed demands that WB take the Citi deal it will still require a vote by shareholders and I strongly suspect that WB's BOD would suggest voting against the Citi deal. Nevertheless, I strongly suspect that WB shareholders would vote against the Citi deal regardless of what the WB BOD suggests.
Citi can sue, but I really think the pressure on the Fed would be overwhelmingly against the Fed requiring WB's shareholders taking a worse deal. Lastly, with the WFC deal there is no Fed involvement, which is something the Fed should want.
The whole deal with Citi was forced and went down in a matter of mere hours. The Fed was just wanting take care of things at the speed of light, not caring about the true outcome and what is best for everyone.
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10-03-2008, 10:37 AM
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Location: Charlotte, North Carolina
5,137 posts, read 9,630,747 times
Reputation: 933
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the problem is that the FDIC head said that they still fully support the Citi/Wachovia deal.
It wont matter anymore if Wachovia really did sign an exclusive agreement. Citibank will take Wachovia to court, and the judge will run in their favor
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10-03-2008, 10:39 AM
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Location: Charlotte, North Carolina
5,137 posts, read 9,630,747 times
Reputation: 933
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