Michael Gracie

Citigroup thought it had Wachovia in the bag - a couple of billion and an FDIC backstop seemed quite the rosy deal. Now Wells Fargo has come along and offered $15 billion, without discernible government assistance.

What does Citigroup do about this? Whine like sissies while hiding behind their lawyers.

Citi is a member of the private club in the burbs, and they just got walloped by the scratch player that hangs around the municipal course. It’s not apparent whether Citi had a breakup fee in the deal, but if they didn’t they should fire their lawyers.

If they proceed to court, everyone should ask themselves why Citi couldn’t do something without government guarantees. And whether they want their tax money backing Citi’s thinly veiled turnaround plan.

UPDATE: WFC gets to accelerate use of Wachovia losses. Take it for what it’s worth: on one hand, this means the deal still ostensibly uses government money - on the other hand, it means Wells Fargo expects to have some earnings.

UPDATE 2: Whining works for now - Citi Granted Emergency Injunctive Relief Extending Exclusivity Agreement between Citi and Wachovia.

The US Office of the Comptroller of the Currency is warning consumers not to respond to any email from them (because it isn’t from them, you nut!). The emails in question ask recipients to verify personal information because of money the agency is holding (presumably for them). The spam claims that the federal agencies are somehow controlling deposit accounts, but those agencies are not directly involved with consumer transactions.

Kind of a lottery ticket in waiting for some - a pain in the butt for the OCC and the FDIC.