Siddharth Dalal

The Lowdown on Citi / Wachovia

What I think about this whole business is here:
www.parchayi.com/2008/.../

It should soon be on seekingaplha too

Robbing Peter to Pay Paul: More on Wachovia / Citi

What I think is about this whole business is here:
www.parchayi.com/2008/.../

and it will hopefully soon be up on seekingalpha too

Robbing Peter to Pay Paul: More on Wachovia / Citi

Here is a link of steel on Cramer - gawker.com/5057233/jim...

Steel said that "Wachovia has a great future as an independent company", not Cramer.

Robbing Peter to Pay Paul: More on Wachovia / Citi

@USC-Col, Steel shafted us all. If this was his plan why the hell was he spewing bullshit on Cramer.

@ishortyou - I see you commenting everywhere about the great assets left behind but you forget Wachovia is a great bank (not counting the mortgage). Everybody knows Citi got a spectacular deal because of that.

Robbing Peter to Pay Paul: More on Wachovia / Citi

@USC Col - I really hope Citi can cope. The company has been posting losses for the last three quarters including one nearly 10 billion loss. So they are not upto snuff either..

Robbing Peter to Pay Paul: More on Wachovia / Citi

@gordon, Steele must have had some serious motivation. He lost 12-13 million$.

@tom, i think Wachovia could have made it alone too if offered the same deal by the Feds that they offered citi.

Robbing Peter to Pay Paul: More on Wachovia / Citi

@t_ngern, I'm saying that WB paying the 12 billion (+ Feds seizing the Golden West part of Wachovia because the rest is great) a better option than what happened now. I know enough about investing to know that we Wachovia shareholders were robbed blind. Plus do have any better suggestions or answers to why us Wachovia shareholders should suffer? Nobody has yet told us how bad Wachovia debt really was.

Hopefully other large shareholders oppose the deal. So far the market is assuming that it is a done deal.

I don't know about WM, but Wachovias toxic debt was about 1/3rd of it's loan portfolio about 110 billion of which they expected losses on 14% of those loans = ~15 billion. I'm not sure what is meant by they expected losses - how much to the dollar are these worth now? 0, 10c, 50c, 75c? Who knows? Could Wachovia have sold those 15 billion worth of loans at 5 billion? 1 billion? Anything is better than what heppened.

The Lowdown on Citi / Wachovia

Yes, I know for a fact that Fidelity owns a lot of wachovia stock - boston.bizjournals.com...

Also if shareholders get to vote on this, who are the people who would vote for this stupid deal?? Citi pays 14billion for wachovia but 12 of it to the Feds! We want that money as shareholders, what is it going to the Fed for - a stupid guarantee that they will probably never need to make good on anyway?

The Lowdown on Citi / Wachovia

Actually the Fed valued Wachovia's taken over assets fairly at about 14 billion but they took away 12 of those 14 and cheated us shareholders.

@terpanther - I sent you an email

The Lowdown on Citi / Wachovia

Yeah it is worth nearly zero now anyway. I would rather Wachovia take its chances individually. Look at it this way. Citi paid 14 billion (2 to WB and 12 to the Feds to take over the parts of Wachovia that it did). Also Citi expects that the losses will ont exceed $42 billion on Wachovia loans. This means that the Fed just got 12 billion in free Citi stock and WB shareholders got screwed. I would rather that my stock become zero than be so badly cheated by the Feds.

The S&P report values the remaining part of Wachovia at $2 and they value the part of Wachovia taken over by Citi at somewhere between 8 and 9$. Citi paid about 7$ for that, most of which went to the Feds. Why?

The Lowdown on Citi / Wachovia

More updates here:
triad.bizjournals.com/...

The Lowdown on Citi / Wachovia

@syndicat, thanks for the info
@those who think shareholders have to vote on this, post here when you find out how and when

The Lowdown on Citi / Wachovia

@big al, @cg - nice to see a couple of different valuations. So any which way you look at it WB's valuation should be at least>$3. Maybe I should just gew some more :), NOT??, maybe at a buck.

@denham - Wall Street has been looking good for a takeover for a while. Soon nothing will really be "American" if this goes on. e.g. Mitsunishi took a 21% stake in Morgan Stanley today. It's a fire sale

The Lowdown on Citi / Wachovia

Looks like WB has started trading at about $2

What is Hank Paulson Thinking?

Where is the subsidy "we" provided? If anything "we" got $12 billion of citi stock for free. But "we the Wachovia shareholders" got screwed, maybe?