Citigroup Buys Wachovia

http://consumerist.com/5055092/citigroup-buys-wachovia

Citigroup is buying Wachovia's deposits, $300 billion of its loan portfolio, and about $42 billion of debt for an undisclosed sum, reports CNN.

Part of Wachovia will remain independent — including its massive brokerage business which ballooned after it purchased AG Edwards in 2007, as well as its Evergreen investment management division.
Soon, we will all be Chase or Citibank customers.

Update: looks like there's a fight between Citigroup and Wells Fargo over the acquisition.

http://www.msnbc.msn.com/id/27027841/

Seems like a strange time to be fighting over who takes control of a bank.

Maybe if the price is right, and the Feds continue to buy all the worthless assets, it makes business sense. After all, Citi is so big, it can't be allowed to fail.

This is like watching hungry fish in a bowl.

What...no Bank of America's in your area? LOL!!! Seriously though are there any of the small local bank in your area, or anybody else's, that are in trouble? I know I haven't heard anything about the one's around here being in fear of going under. From what I can see it's some of the nationals and regionals who have gotten into trouble.

My head is still spinning from Wachovia's recent takeover of World Savings (of which I and my family were loyal customers for decades); and now they are being absorbed???

Dave, dreading having to learn yet another new Web Banking interface...

They're being absorbed precisely because they did buy World Savings. Turns out World Savings holding bank had $122B in questionable loans, and were leveredged at 40:1. With the buyout, that pushed Wachovia from it's traditional 10:1 to 22:1, which when the ARM mortgages started defaulting, killed the cash flow that the bank needed. Normally, not a huge deal, the bank would simply borrow on the Commercial Paper market. But wait, one of the largest borrowers of Commercial Paper was Leimann Brothers. Suddenly, nobody was willing to invest in Commercial Paper (the investment Money Market funds are in). Now Wachovia, which was strapped for cash, was facing the trouble of bad debt leveredged against them.

The saddest part of this is, until the merger that brought them World Savings, Wachovia was one of the banks that was not heavily invested in mortgages.

It's a domino effect, and the final result is trickling up still.