Beating Broke

Personal Finance from the Broke Perspective

Wachovia Changes Direction, to be Acquired by Wells Instead

By Leave a Comment

Last week, it was announced that Wachovia was to be acquired by CitiGroup.  The deal was to have the assistance of the FDIC and the Treasury.

Today, in a complete change of direction, Wachovia announced that they were instead going to be acquired by Wells Fargo.  The new deal, worth a reported $15.1 Billion will be all stock and be completely free of any assistance from the FDIC or the Treasury.

I’m no expert, but I think that is good news.  Wells Fargo is a pretty good bank.  And I really like that they aren’t going to be using any assistance from the Government.  The Government has already done more than enough if you ask me and with the eminent bail out bill, the less other assistance they are giving the better we’ll all end up.

UPDATE: It seems that Citi is a little angry about the whole thing and is claiming that they had an exclusivity contract with Wachovia.  Citi is demanding that the merger between Wells Fargo and Wachovia be nulled.

Should WalMart have Bought WaMu?

By Leave a Comment

Finance Junkie at Pluggedinfinance had a pretty good idea.  Why not allow WalMart to bail out one of these failed banks?

I think it’s a splendid idea.  I like WalMart.  I disagree with the arguement that WalMart puts mom and pops out of business.  I think that WalMart makes life better for a pretty large number of people.  And I, for one, would be excited to see what they would do to the banking industry should they enter the market.

So, why not let WalMart buy a bank?  I’m sure they’ve got the capital.  And they have the will and ability to pull a bank out of the hot water.

I wonder who needs to be contacted to get this moving?

WaMu Fails, Gets Bought in the Same Day

By Leave a Comment

Earlier today, banking giant WaMu, was put into a conservatorship by the U.S. Treasury.  That’s a nice way of saying that the bank was failing and failing fast.  I’m of the opinion that if they can’t handle their money very well and fail, then let them fail.  Sure it disrupts things, but that’s the American way.  Or it was.  Now we just print/mint more money to bail these businesses out and off they go.  How come nobody bailed out Enron?  And don’t tell me it was because of the fraud stuff going on.  You should note that several other institutions that have “failed” and been put into a conservatorship recently were announced as being under investigation for fraud.

That’s neither here nor there though.

Later this evening, it was announced that WaMu was being bought by another financial giant, JPMorgan Chase.  What we are now seeing is a consolidation of many of the failed banks.  It’s the cycle of business life.  Businesses near failure and get bought.  Or fail.  Some just slip into the ether and are never heard of again.  But if this continues, we’ll only have three or four major banking businesses around.  Not exactly horrible, but it makes it pretty hard if you dislike a couple of them.

With a bailout looming for the economy (with money freshly minted from thin air) we might begin seeing a turn around.  I kind of doubt it however.  The Government doesn’t have the 700B that Paulson says it will take to bailout the economy so they’ll weaken the dollar to nearly nothing by doing it.  Sure, it’ll weaken if they don’t, but we can’t just go around making money as we go.