Wachovia was bought up today by Citigroup, shortly before it seems to have been expected to fail. A Wachovia Morning it is not. Neither I nor anyone else at this point have a clue as to how this happened. I have convinced myself it is not just a mortgage crisis. Wachovia was worth far more than the mortgage mess they bought with Golden West. Some writers are saying a silent run on the bank. Could be, but if so, maybe we really need to get serious in analysing just exactly what is going on. Is the system being manipulated to force all but the top three banks to fail? If so who, why, where, and what have they done.
At this point I do not think anything should be summarily ruled out. The proposed bailout would tend to obscure, and legitimize this whole convoluted process. We do not need that to happen. This debacle needs to be investigated at length. The whole financial system should be simulated. Run the actual transactions through a market simulator, discover who was actually doing what to whom, and seek indictments for those found responsible for manipulating banks into failure.
The Wachovia collapse could be an inside wall street job. If it is, the perpetrators themselves need to be allowed to fail, before anyone gets bailed out. It is very, very interesting that the 4th largest US bank was strong armed into a fire sale the very day of the big vote. After the fire sale of Wachovia, what exactly is the point of the bail out? There is no one else left to salvage. Maybe that is why the vote failed.
One should remember Wachovia is quite old – dating from about 1850 – but never really a New York bank. They did a lot of commercial business, before the take over by First Union. First Union was more of a retail bank, wanting to be a big commercial bank. Wachovia was more of a old commercial bank moving into retail. The old Wachovia was very much a main street bank in serious republican country. I know my republican friends don’t like anyone messing with their banks – not even their president.