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The US Economy and Current Financial Crisis, For news, comments, suggestions and freakouts
Cheech Tremendou...
post Sep 26 2008, 10:25 AM
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It'd be nice to keep this stuff separate from the lumbering monster that is the Campaign 2008 thread. Use this thread to discuss the on-going failures of our economy and any potential solutions.

Washington Mutual was seized by the government today. It is the largest banking failure in US history.

Article attached below is from nytimes.com.

QUOTE
Government Seizes WaMu and Sells Some Assets

By ERIC DASH and ANDREW ROSS SORKIN

Washington Mutual, the giant lender that came to symbolize the excesses of the mortgage boom, was seized by federal regulators on Thursday night, in what is by far the largest bank failure in American history.

Regulators simultaneously brokered an emergency sale of virtually all of Washington Mutual, the nation’s largest savings and loan, to JPMorgan Chase for $1.9 billion, averting another potentially huge taxpayer bill for the rescue of a failing institution.

The move came as lawmakers reached a stalemate over the passage of a $700 billion bailout fund designed to help ailing banks, and removed one of America’s most troubled banks from the financial landscape.

Customers of WaMu, based in Seattle, are unlikely to be affected, although shareholders and some bondholders will be wiped out. WaMu account holders are guaranteed by the Federal Deposit Insurance Corporation up to $100,000, and additional deposits will be backed by JPMorgan Chase.

By taking on all of WaMu’s troubled mortgages and credit card loans, JPMorgan Chase will absorb at least $31 billion in losses that would normally have fallen to the F.D.I.C.

JPMorgan Chase, which acquired Bear Stearns only six months ago in another shotgun deal brokered by the government, is to take control Friday of all of WaMu’s deposits and bank branches, creating a nationwide retail franchise that rivals only Bank of America. But JPMorgan will also take on Washington Mutual’s big portfolio of troubled assets, and plans to shut down at least 10 percent of the combined company’s 5,400 branches in markets like New York and Chicago, where they compete. The bank also plans to raise an additional $8 billion by issuing common stock on Friday to pay for the deal.

Washington Mutual, with $307 billion in assets, is by far the biggest bank failure in history, eclipsing the 1984 failure of Continental Illinois National Bank and Trust in Chicago, an event that presaged the savings and loan crisis. IndyMac, which was seized by regulators in July, was one-tenth the size of WaMu.

But fears of the fallout from the government takeover of a big bank were balanced with the removal of one of the largest remaining clouds looming over the banking industry.

“This institution was a big question mark about the health of the deposit fund,” Sheila C. Bair, the chairwoman of the F.D.I.C., said on a conference call Thursday. “It was unique in its size and exposure to higher risk mortgages and the distressed housing market. This is the big one that everybody was worried about.” She said that the bank’s rapidly deteriorating condition prompted regulators to seize it Thursday, and not on a Friday as is typical for bank closures.

For weeks, the Federal Reserve and the Treasury Department were nervous about the fate of WaMu, among the worst-hit by the housing crisis, and pressed hard for the bank to sell itself. Washington Mutual publicly insisted that it could remain independent, but the giant thrift had quietly hired Goldman Sachs about two weeks ago to identify potential bidders. But nobody could make the numbers work and several deadlines passed without anyone submitting a bid.

But as panic gripped financial markets last week after the collapse of Lehman Brothers, WaMu customers started withdrawing their deposits. The government then stepped up its efforts, at points going behind WaMu’s back to work privately with four potential bidders on a deal. On Wednesday afternoon, the government solicited formal written bids. On Thursday morning, regulators notified James Dimon, chairman and chief executive of JPMorgan Chase, that he was the likely winner.

“We are building a company,” Mr. Dimon said in a brief interview. “We are kind of lucky to have this opportunity to do this. We always had our eye on it.”

But the seizure and the deal with JPMorgan came as a shock to Washington Mutual’s board, which was kept completely in the dark: the company’s new chief executive, Alan H. Fishman, was in midair, flying from New York to Seattle at the time the deal was finally brokered, according to people briefed on the situation. Mr. Fishman, who has been on the job for less than three weeks, is eligible for $11.6 million in cash severance and will get to keep his $7.5 million signing bonus, according to an analysis by James F. Reda and Associates. WaMu was not immediately available for comment.

The government has dealt with troubled financial institutions differently. Lehman Brothers and Washington Mutual, which were less entangled with the rest of the financial system, were allowed to collapse. But the government took emergency measures to stabilize Goldman Sachs, Morgan Stanley and the American International Group, the insurance giant.

Federal regulators had been trying to broker a deal for Washington Mutual because a takeover by the F.D.I.C. would have dealt a crushing blow to the federal government’s deposit insurance fund. The fund, which stood at $45.2 billion at the end of June, has been severely depleted after suffering a loss from the sudden collapse of IndyMac Bank. Analysts say that a failure of Washington Mutual would have cost the fund as much as $30 billion or more.

The deal will end WaMu’s 119-year run as an independent company and give JPMorgan Chase branches in California and other markets where it does not have a big presence.

Until recently, Washington Mutual was one of Wall Street’s strongest performers. It reaped big profits quarter after quarter as its then chief executive, Kerry K. Killinger, enlarged its presence by buying banks on both coasts and ramping up mortgage lending.

His goal was to transform what was once a sleepy Seattle thrift into the “Wal-Mart of Banking,” which would cater to lower- and middle-class consumers that other banks deemed too risky. It offered complex mortgages and credit cards whose terms made it easy for the least creditworthy borrowers to get financing, a strategy the bank extended in big cities, including Chicago, New York and Los Angeles. With this grand plan, Mr. Killinger built Washington Mutual into the sixth-largest bank in the United States.

But underneath the hood, the bank’s machinery was failing.

Then the housing market began to crumble. Like so many other financial institutions, the bank tried to hedge its mortgage bets — but did so poorly. It retrenched on its branch-building ambitions. But none of that was enough to deflate ballooning losses on mortgage loans, nor defuse ticking time bombs like interest-only and pay-option amortization products that had reeled in bottom-grade borrowers.

With rising mortgage payments and higher gas and food bills, WaMu’s losses in its big credit card loan portfolio also surged.

By then, however, WaMu’s troubles had set off alarm bells on Wall Street, which ground its share price down daily.

With options narrowing, WaMu frantically reached out to several banks and big private equity firms, including the Carlyle Group and the Blackstone Group.

In March, JPMorgan Chase saw an opportunity and urged WaMu in a letter to consider a quick deal. On the same weekend that Mr. Dimon negotiated his daring takeover of Bear Stearns, he secretly dispatched members of his team to Seattle to meet with WaMu executives. When JPMorgan Chase offered WaMu $8 a share, largely in stock. But Mr. Killinger balked at the deal.

In April, David Bonderman, a founder of the TPG private equity firm, and a group of institutional investors agreed to infuse $7 billion of capital into the bank. Mr. Killinger kept his job, and Mr. Bonderman, who had served as a WaMu director from 1997 to 2002, returned with a board seat and 176 million WaMu shares priced at about $8.75 each — steep discount of more than 25 percent to that day’s share price.

While the deal was sweet for Mr. Bonderman, it eroded the value for existing shareholders, enraging them. They moved on June 2 to strip Mr. Killinger of his chairmanship. Mr. Bonderman, meanwhile, watched his golden bet turn to dross. In a statement Thursday, TPG said: “Obviously, we are dissatisfied with the loss to our partners from our investment in Washington Mutual.”
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The Niggardly Ki...
post Sep 26 2008, 10:42 AM
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Lord of The Curr...
post Sep 26 2008, 01:22 PM
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Can somebody break this down in laymans terms for me? Despite working for a bank for over a year my financial knowledge, especially with foreign markets is rudimentary at best. I imagine the sub-prime mortages play a factor, no?
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EricMM
post Sep 26 2008, 01:59 PM
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(no sarcasm)

Really?
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PUT THAT DICK IN...
post Sep 26 2008, 02:00 PM
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fuck the price on the tag, just throw it in the bag


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This is probably the best summary of it that I've seen. Here it is in a rly simplified form (at least as far as I understand it):

(1) There was a bubble in the housing market. People started taking out risky mortgages in order to buy houses, fully expecting house prices to continue climbing. As the feeding frenzy grew lenders started giving out even riskier mortgages to people with shaky credit, counting once again on rising prices to take care of everything.

(2) Lenders began selling the rights to these mortgages to third parties. These third parties then sliced and diced these mortgages good and bad, packaged them in all sorts of nifty ways, and sold them to AIG et al, who proceeded to use them as backing to take on debt of their own (mainly by doing stuff like lending at a rate of $30 for every $1.00 they were actually holding). This, it should be noted, was extremely stupid/risky/short-sighted behavior. It was also made possible thanks in large part to a lack of oversight and regulation by the government (thanks, Republicans!)

(3) The bubble popped. Prices stopped rising and people stopped making their mortgage payments. As a result, those mortgage packages the big banks were holding became functionally worthless and the banks were thus unable to pay off their own debts.

(4) The shit hit the fan. Glorious days are gone and everybody's doing bad (well, except for the CEOs who got us into this mess. A lot of them have already walked away with multi-million dollar severance packages. Welp/)

So basically the whole American banking system was involved in a giant pyramid scheme that has now collapsed on itself. lol (IMG:http://forums.thesmartmarks.com/style_emoticons/default/sad.gif)
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The Niggardly Ki...
post Sep 26 2008, 02:17 PM
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It's gonna be cool how when we go down... we're taking most of the other semi-free markets with us. Whatcha gonna do, brother?
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Cheech Tremendou...
post Sep 26 2008, 03:09 PM
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QUOTE (Chilly Willy @ Sep 26 2008, 01:00 PM) *
This is probably the best summary of it that I've seen. Here it is in a rly simplified form (at least as far as I understand it):

(1) There was a bubble in the housing market. People started taking out risky mortgages in order to buy houses, fully expecting house prices to continue climbing. As the feeding frenzy grew lenders started giving out even riskier mortgages to people with shaky credit, counting once again on rising prices to take care of everything.

(2) Lenders began selling the rights to these mortgages to third parties. These third parties then sliced and diced these mortgages good and bad, packaged them in all sorts of nifty ways, and sold them to AIG et al, who proceeded to use them as backing to take on debt of their own (mainly by doing stuff like lending at a rate of $30 for every $1.00 they were actually holding). This, it should be noted, was extremely stupid/risky/short-sighted behavior. It was also made possible thanks in large part to a lack of oversight and regulation by the government (thanks, Republicans!)

(3) The bubble popped. Prices stopped rising and people stopped making their mortgage payments. As a result, those mortgage packages the big banks were holding became functionally worthless and the banks were thus unable to pay off their own debts.

(4) The shit hit the fan. Glorious days are gone and everybody's doing bad (well, except for the CEOs who got us into this mess. A lot of them have already walked away with multi-million dollar severance packages. Welp/)

So basically the whole American banking system was involved in a giant pyramid scheme that has now collapsed on itself. lol (IMG:http://forums.thesmartmarks.com/style_emoticons/default/sad.gif)



That's a nice summary of what led to the current problem, but you haven't explained what this all means to our future economy. So...

5) The financial institutions are all heavily invested in mortgage-backed securities that are failing left and right. Without a place to dump their bad loans and not knowing how much worse things can get, lenders have become increasingly tight with their money. Since banks can no longer borrow easily from each other, the availability of credit has dried up. What this means is that the banks don't have any money to loan to anyone. This affects every every credit purchase, from the new couple looking to buy a home, a child seeking a loan for college or a construction company building a new office complex.

Without these funds, our economy stalls out, people start hoarding money and we fall into a downward spiral. Essentially we are left with a non-functioning economy; some economists call this a "depression."

Here's a decent article that sort of recaps what I just said:

http://www.nytimes.com/2008/09/26/business...amp;_r=1&em
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Rendclaw
post Sep 27 2008, 04:26 AM
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I know my money is insured by the FDIC, but I am seriously considering pulling my account, anyway.
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Dandy
post Sep 27 2008, 08:19 AM
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I just got out of the financial industry a couple months ago, and I am very pleased that I did. I was perfectly fine with continuing my own investments (and increasing how much I invested) because it has to go back up. The problem is that the vast majority of us panic in this situation and act like it is much worse than it is. I am not saying we are in terrific shape by any means, but we haven't reached 1929 levels yet. Hell, the DJIA is still going back and forth around the 11,000 mark, a place that we would have killed for it to be at a few short years ago.

I am not contradicting what Cheech or Chilly are saying by any means, just giving the investments spin on the situation. Folks that I talked to were scared to death because the market lost big since the start of the year, and they started taking their investments out prematurely. This was stupid for several reasons, including the fact that their investments were not directly involved with the DJIA, yet that is the first thing everyone sees when getting information on the economy from the media; the fact that they took penalties and tax hits on taking their money out of the investments before the age of 59 1/2 or before their surrender charges were gone; they are now simply "burying the money in the backyard," and not keeping pace with inflation.

For example, let's say a couple were in their early 50's and had accumulated $100,000 through savings, bonds, CDs, etc. They talked to a financial advisor who sold them on the fact that they could get tax-deferred growth at better rate of return than they had been getting up to that point. If they averaged 7.2%, they would double their money in 10 years. However, with increased reward, their is increased risk. They were told about the surrender penalties, they were told about the taxation, and the fact that it is a variable rate of return and they might have a loss for a quarter, several quarters, or even a couple of years. However, the initial investment is insured. They are sold! All they heard was that for a mere 7.2% average over ten years, they were going to double their money.

In the first year, their investment made 11.2%. We'll estimate the account to be at $110,000 after the annual fees are taken into account, just for the sake of it being a round number. Now this year, we have this financial crisis brewing, and they flip their shit because they are at -5.2% on the year. They withdraw their money before it has a chance to lose even more money. What are the consequences?

$104, 280 is the balance at the time they decide to take it out. There is a 10% penalty from the government for withdrawing the money before age 59 1/2. There wes a declining surrender penalty each year for the first 7 years of the contract, and in year two, that would have been a 7% penalty. They are also taxed at ordinary income rates on the money they made, which was $4,280. We'll assume they are in a 25% tax bracket. Here is the result:

$104,280.00
-$10,428.00
-$7,299.60
-$1,070.00

for a total of $85,482.40. They now do not trust any investment, and they lock it up in a safe due to the bank crisis that is going on. They tell their story to all of their friends, family, neighbors, co-workers, etc., causing even more panic and a growing unwillingness to invest. This causes the stock market to fall even further, which starts the cycle over again.

The moral of the story is that if you educate yourself and don't act like a retard, you can make it through this financial crisis. Yes it will be a little more difficult than normal, but you have to learn where to cut corners. Your investments are not the right place to make those cuts. Go over your budget and see where you are making unnecessary expenditures or where you can trim the fat. You will be surprised how much you can save which will help you make it through the tougher times. Also, there are still banks out there to get loans from, you just have to be patient and make good decisions, like you should anyway.
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cbacon
post Sep 27 2008, 06:22 PM
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The question is whether Americans can trust Bush and his millionaire cabinet to defend the interests of the working families who are footing the bill. This is a government that believes every problem can be solved by giving money to rich people with no strings attached. And its only opposition is the Democrats, who are beholden to the same corporate interests. I want to know what taxpayers are getting for their $700B, other than bad debts and a roll of the dice. A truly democratic government would socialize the financial institutions themselves and not just their bad debts. In other words, I would be okay with investing public money to bail out the banks if the public would gain control over those institutions and their potential profits. I doubt that's what Bush has in mind.
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MarvinisaLunatic
post Sep 27 2008, 07:09 PM
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The Government wants to buy back all the bad mortgages from the banks. The majority of the "bad" mortgages however won't go into foreclosure and when the Economy turned around, they could resell the majority of the Mortgages that they bought for 700 billion for upwards of close to 2 Trillion dollars in a few years. Of course, the Government would have no intention of taking that money and using it to reduce debt, put a dent in the Medicare/Social Security black hole or any other reasonable use of the money because any money that they would make (the 2 Trillion) would already be spent on more government programs and crap (HEALTHCARE! YAY!) before they ever even see the profits on the deal, which is a huge risk because if the Economy doesn't improve, then all that this would end up accomplishing would be increasing the debt of the nation even further.

The Republican insurance program that they've come up with is pretty much a joke because theres no way they can raise enough funds to cover a majority of the mortgages in case of them going bad by at a low enough price that would attract people to buy in the insurance. The government would almost have to require the insurance and set the price high which would cause all sorts of problems.



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Jobber of the We...
post Sep 27 2008, 10:05 PM
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QUOTE (cbacon @ Sep 27 2008, 05:22 PM) *
A truly democratic government would socialize the financial institutions themselves and not just their bad debts.

I have no interest in this for exactly the reasons you stated, because it's just throwing more good money after bad.

I have no problem letting the market shrink like what's been going on. You, on the other hand, might be less interested in whether Joe US Taxpayer is getting a good deal but simply keeping the market propped up since if it's curtains for us it has a ripple effect for you.

QUOTE
In other words, I would be okay with investing public money to bail out the banks if the public would gain control over those institutions and their potential profits. I doubt that's what Bush has in mind.

It is, essentially, what's going on with Fannie/Freddie.
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Red Baron
post Sep 27 2008, 10:08 PM
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The only thing that irks me about this is that the goverment "found" $700 Billion to bail out this, but couldn't find any money and improve their health care.
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MarvinisaLunatic
post Sep 27 2008, 10:15 PM
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QUOTE (The Monkey Man @ Sep 28 2008, 12:08 AM) *
The only thing that irks me about this is that the goverment "found" $700 Billion to bail out this, but couldn't find any money and improve their health care.

Im tired of hearing "OH, the government has money for a bailout but not for healthcare".

Any program the government runs could be run 1000000000x better by someone else. We dont need government run healthcare to make the system that much worse than it already is.
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Jobber of the We...
post Sep 27 2008, 10:45 PM
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QUOTE (MarvinisaLunatic @ Sep 27 2008, 09:15 PM) *
Any program the government runs could be run 1000000000x better by someone else. We dont need government run healthcare to make the system that much worse than it already is.

You don't need the government to run health care. You need government to run paying for health care. As it is we're paying much more per person than anyone whose government pays for health costs.

Private industries with shareholders have built a model that puts profits before people. Government allows for collective bargaining that gives you leverage you can't get on your own in a world of medical underwriting and high costs.
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Cheech Tremendou...
post Sep 29 2008, 10:21 AM
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Another one bites the dust...

http://www.nytimes.com/2008/09/30/business...agewanted=print

QUOTE
Citigroup Buys Banking Operations of Wachovia

By ERIC DASH and ANDREW ROSS SORKIN
Citigroup reached an agreement early Monday morning to acquire the banking operations of the Wachovia Corporation after making a daring bid that pulled the deeply troubled company from the brink of collapse.

Citigroup will pay $1 a share, or about $2.2 billion, according to people briefed on the deal.

Federal regulators worked around the clock this weekend to orchestrate the sale, finally reaching an agreement at 4 a.m. on Monday morning. In the end, the government agreed to provide Citigroup with a financial guarantee on Wachovia’s most risky assets. It is similar to the deal that the Federal Reserve established with JPMorgan Chase’s emergency takeover of Bear Stearns.

Citigroup will assume the first $42 billion on losses tied to Wachovia’s riskiest mortgages and will pay the Federal Insurance Deposit Corporation $12 billion in preferred stock and warrants. In exchange, the F.D.I.C. will absorb all losses above that amount.

Federal regulators said the move was necessary to stave off what could have been the second big bank failure in less than a week. On Thursday, the government seized Washington Mutual and sold the bulk of its operations to JPMorgan Chase.

“This morning’s decision was made under extraordinary circumstances with significant consultation among the regulators and Treasury,” said Sheila C. Bair, the chairwoman of the F.D.IC in a statement. “This action was necessary to maintain confidence in the banking industry given current financial market conditions.”

Wachovia customers should not notice any changes. “There will be no interruption in services and bank customers should expect business as usual,” Ms. Bair added.

The deal further concentrates Americans’ bank deposits in the hands of three banks: Bank of America, JPMorgan Chase and Citigroup will control more than 30 percent of the industry’s deposits.

Together, they will have unrivaled power to set prices for their loans and services. The institutions would probably come under greater scrutiny from federal regulators, given their size and reach. And some small and midsize banks, already under pressure, might have little choice but to seek suitors in order to compete.

The deal highlights just how bad the banking industry’s problems have gotten as well as the progress that Citigroup after being one of the first to suffer huge losses. Citigroup’s chief executive, Vikram S. Pandit, has recently been making the case to employees and investors that Citigroup is a “pillar of strength” in turbulent times. If he is successful, this transaction could be an important milestone.

Under the deal, Citigroup will buy all of Wachovia’s assets and liabilities — a move that should protect Wachovia’s bondholders. It will also acquire Wachovia’s big retail operations as well as its corporate and private banking. It will also takeover Wachovia’s relatively small investment banking operations, which have catered to real estate and medium-size corporations. Citigroup is leaving behind the A.G. Edwards retail brokerage operations and Evergreen Investments, Wachovia’s money management arm. Senior management decision have not been worked out, according to people involved in the talks.

With Wachovia’s branch network, Citigroup will now have one of the biggest retail banking franchises in the country after years of false starts. That should give Citigroup a larger platform to sell home loans and credit cards, and would give it access to more than $400 billion in more stable customer deposits. The bank has been aggressively trying to reduce its dependence on outside investors for funds.

The risk is that Citigroup could be saddled with tens of billions of dollars in losses tied to Wachovia’s giant loan portfolio. Wachovia has been hurt badly by its 2006 purchase of Golden West Financial, a California lender specializing in so-called pay-option mortgages. And the bank also faced mounting losses on loans made to home builders and commercial real estate developers.

To pay for the deal, Citigroup expects to raise more than $10 billion by issuing new shares of its common stock. It will also slash its dividend to 16 cents a share, the second time in the last year.

Another risk is that Citigroup has had a poor track record of putting together mergers, although it now has a new management team. Citigroup shares were essentially flat in late morning trading on Monday.

Last week, Wachovia held discussions with Citigroup, Wells Fargo and Banco Santander of Spain, before the foreign bank’s interest cooled. But the talks intensified this weekend as lawmakers worked in Washington to hammer out the details of a $700 billion bailout plan. Wachovia executives, meanwhile, huddled in the Seagram Building offices of Sullivan & Cromwell on Park Avenue.

Robert K. Steel, a former top lieutenant of Henry M. Paulson Jr. at both Goldman Sachs and then the Treasury Department, who took over as Wachovia’s chief executive in July, arrived in New York to handle the negotiations in person, along with David M. Carroll, the bank’s chief deal maker. At 8:15 am. on Saturday, Citigroup and Wells Fargo took their first peek at Wachovia’s books.

Regulators pressed the parties to move quickly. Senior officials at the Federal Reserve in Washington, and its branches in New York, Richmond and San Francisco held weekend discussions with all the banks involved. Top officials at the Federal Deposit Insurance Corporation and the Treasury were also in the loop.

Timothy F. Geithner, the president of the Federal Reserve Bank of New York, personally reached out to executives involved in the process to assess the situation and spur it along. Citigroup and Wells Fargo pressed regulators to seize Wachovia and let them buy its assets and deposits, as JPMorgan did with WaMu, or provide some sort of financial guarantee, as regulators did with JPMorgan’s acquisition of Bear Stearns, according to people briefed on and involved with the process.

Both Citigroup and Wells Fargo were deeply concerned about absorbing Wachovia’s giant loan portfolio, which is littered with bad mortgages, these people said. Bankers had little time to assess the risk.

Citigroup executives considered Wachovia a make-or-break deal for their consumer banking ambitions. With Wachovia, Citigroup would gain one of the pre-eminent retail bank operations after struggling to build one for years. It would also give Citigroup access to more stable customer deposits, allowing it to rely less heavily on outside investors for funds. If it failed to clinch a deal, Citigroup’s domestic retail operations would be far behind Bank of America and JPMorgan Chase. Mr. Pandit, the Citigroup’s chief executive, was personally overseeing the talks

Now, the challenge for Mr. Pandit will be making the deal work. Citigroup said on Monday it expected the deal to add to earnings in the first year, excluding a $3.7 billion restructuring charge. It also expects to reap about $3 billion in annual cost savings, though it did not disclose possible layoffs. If Citigroup can pull it off, it would be a symbolic victory of sorts. For Citigroup, the deal is the largest acquisition since the merger of Citicorp and Travelers Group forged the company a decade ago.

Although Citigroup has racked up nearly $50 billion in losses since the crisis began last summer and has watched the value of its shares sharply decline, the bank was also among the first to raise large amounts of capital. Mr. Pandit may point to the Wachovia deal as a sign of progress and an indication that the worst for the bank is behind it.

The deal will also be seen as a stamp of approval from regulators. Only a few years ago, the Federal Reserve took the unusual step of banning Citigroup from making "significant acquisitions." Gaining their approval to do a big deal on such short notice will probably be viewed as a big vote of confidence in Mr. Pandit’s management team.
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post Sep 29 2008, 12:00 PM
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Congress did not pass the bailout. 94 Democrats and 132 Republicans voted no. Good.
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Cheech Tremendou...
post Sep 29 2008, 12:21 PM
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Fuck fuck fuck

EDIT: And the Dow drops 550 points. Awesome.
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bobobrazil1984
post Sep 29 2008, 01:39 PM
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Lets just hope all those people insisting that without this bailout, dire shit was going to happen... were just blowing smoke out of their asses.

I'm just glad that I don't have any money in any of the areas hit so far. All I have is my bank account at a normal bank. i should be ok... right? RIGHT?
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EricMM
post Sep 29 2008, 01:43 PM
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Do you own a home?

Do you have a mortgage out?
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Cheech Tremendou...
post Sep 29 2008, 02:07 PM
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"Hot Pants"


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QUOTE (metr0man @ Sep 29 2008, 12:39 PM) *
Lets just hope all those people insisting that without this bailout, dire shit was going to happen... were just blowing smoke out of their asses.

I'm just glad that I don't have any money in any of the areas hit so far. All I have is my bank account at a normal bank. i should be ok... right? RIGHT?

Do you work for a small or mid-size company? If they aren't able to get a short-term loan for payroll purposes, you may be out of a job.

Own a home? Watch that value spiral downward.

Want to buy a car? Secure a new credit card? Get a college loan? Good luck.

Oh, and you better hope you don't have any moved saved for your retirement because it might be gone.
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Cheech Tremendou...
post Sep 29 2008, 02:08 PM
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Dow closes with the single largest point drop in history. Oil is down $10/barrel.

Glad that those people in Congress were more interested in making a political statement against a lame duck President than act in the best interest of the people.

Un-fucking-believable.
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Prophet of Mike ...
post Sep 29 2008, 02:10 PM
Post #23


Doesn't do steroids. Injects cheesesteaks instead.


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Honest to God, I probably lost most of my money in the stock market. I am afraid to look at my account.

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CanadianChris
post Sep 29 2008, 02:15 PM
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Retired


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Now is the time to buy. Well, maybe not right now this instant, because the Dow's going to drop even lower, but right around now.
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Prophet of Mike ...
post Sep 29 2008, 02:20 PM
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Doesn't do steroids. Injects cheesesteaks instead.


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As of right now I have lost more than 5K dollars. Woohoo!
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ZGangsta
post Sep 29 2008, 02:21 PM
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QUOTE (Cheech Tremendous @ Sep 29 2008, 08:08 PM) *
Dow closes with the single largest point drop in history. Oil is down $10/barrel.

Glad that those people in Congress were more interested in making a political statement against a lame duck President than act in the best interest of the people.

Un-fucking-believable.

Two-thirds of the Republicans voted against it, I don't think they were interested in making a statement against the president.


And holy fuck the stock market!
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naiwf
post Sep 29 2008, 02:26 PM
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NYC = New York Chokers


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The best part of the near 778 point drop was that it followed people on CNN last night claiming that the market was about to turn around and that some major deals were probably going to get done since we were on the right track. The House Republicans just took it to the average American with a nightstick and no lube. Gotta love politicians trying to get re-elected instead of helping out the people who elected them in the first place. This shit is awesome.
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ZGangsta
post Sep 29 2008, 02:31 PM
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QUOTE (naiwf @ Sep 29 2008, 08:26 PM) *
The best part of the near 778 point drop was that it followed people on CNN last night claiming that the market was about to turn around and that some major deals were probably going to get done since we were on the right track. The House Republicans just took it to the average American with a nightstick and no lube. Gotta love politicians trying to get re-elected instead of helping out the people who elected them in the first place. This shit is awesome.

Yeah, all those years of giant government and huge spending and they pick NOW to start pretending to act like conservatives.
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CanadianChris
post Sep 29 2008, 02:43 PM
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Well, now we'll get to see what the Great Depression was like first-hand.
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At Home
post Sep 29 2008, 03:03 PM
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You and I and a flame make three!


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QUOTE (CanadianChris @ Sep 29 2008, 01:43 PM) *
Well, now we'll get to see what the Great Depression was like first-hand.


Are you talking about the US? Or how when the US economy sneezes, Canada catches a cold?

Either way, we've got a long way to go until we hit Great Depression status. It's a recession with a market crisis, but it's no depression. The Great Depression was made worse when international trade collapsed overnight thanks to the Hawley-Smoot Tariff. Not to mention that our unemployment hasn't reached double digits.
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