Mr. B

Exclusive: Big Banks' Recent Profitability Due to AIG Scam?

There is always more to these situations than meets the eye. Given the lack of character of the participants, it is not hard to imagine that Paulson and Geithner have been less than honest with the taxpaying public.

The real problem at AIG-FP was the ability to write these "policies" without having to post collateral. A collateral requirement would have prevented this from ever happening. Instead, leverage was infinite. Now everyone gets to pay and the bailout is really for speculators, which could have been banks, hedge funds or other market participants. Add that to the outrage.

Citi Examines Its Carrots and Sticks

What you miss is that WB would have been in receivership and would not have had the opportunity to take advantage of TARP. It is what WFC and WB management is missing too. WB would have been worth materially less (x - unknown $) without the Citi deal. WFC is essentially stealing this from Citi.



On Oct 05 09:19 AM hunter wrote:

> With either deal Wachovia shareholders are not getting just value
> for what Wachovia is worth. With the rescue package passed and relaxation
> of mark to market accounting rules Wachovia may want to remain independent.
> Wachovia employees should push for them to remain independent. Maybe
> even tkae pay cuts to improve the company.

Breaking News: Wells Fargo Buys Wachovia

This is far from over.

Wachovia would have been in receivership this Monday if Citi and the FDIC did not step in. Wells walked. There would have been no real value today without Citi.

The Citi deal also protects taxpayers by issuing the FDIC $12 billion in preferred stock at 6% and warrants.

Wells will find its credit rating lowered. Wells is exposed to California real estate in a big way, especially with second mortgages. Wachovia doubles down on that bet. What happens if this deal is allowed to stand and then Wells needs to be bailed out at sometime in the future?

If the Wells deal stands, it will have a chlling effect on the ability of the FDIC to arrange other bank deals that help protect depositors and minimize the risk to taxpayers.

This deal should belong to Citi. Even the FDIC thinks so. We will see.

Turnabout: Wells Fargo's Better Deal for Wachovia

This is far from over.

Wachovia would have been in receivership this Monday if Citi and the FDIC did not step in. Wells walked. There would have been no real value today without Citi.

The Citi deal also protects taxpayers by issuing the FDIC $12 billion in preferred stock at 6% and warrants.

Wells will find its credit rating lowered. Wells is exposed to California real estate in a big way, especially with second mortgages. Wachovia doubles down on that bet. What happens if this deal is allowed to stand and then Wells needs to be bailed out at sometime in the future?

If the Wells deal stands, it will have a chlling effect on the ability of the FDIC to arrange other bank deals that help protect depositors and minimize the risk to taxpayers.

This deal should belong to Citi. Even the FDIC thinks so. We will see.