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 Fed Open Market Committee met today. They opted to lower the fed funds rate 25 bips, and do the same with the discount rate. Some traders were sorely disappointed:

Among those not amused by The Fed’s decision to put the possibility of $5/gallon gas for many over the cleaning up of the errors of a few, screaming demon Jim Cramer - a bit whiny for this information consumer. Another person that will not be swigging fine scotch (like the bottle I just received as a holiday gift) tonight, Wells Fargo Chairman Richard Kovacevich, who was pretty certain just this morning that the Fed would cut the discount rate by 50 to 75 bips.

After the market closed, I was waiting for the Fed to say “Oops, we made a mistake.” But alas, it didn’t come. Thank goodness for that.

UPDATE: Fed governor Eric S. Rosengren was disappointed too.

UPDATE 2: Backpedaling. The Fed always does this, so what’s the fuss?

UPDATE 3: Ha! Just kidding.

Wells Fargo is introducing anti-fraud alerts for its online banking customers, and I just have to wonder how long it will be until phishers are faking the same for less worthwhile (or more worthwhile, if you are the perp) causes.

Included in the bunch will be alerts when a suspicious access attempt (to accounts that is) is made, as well as notifications when transactions exceed a certain volume. While the latter might be helpful (as long as folks actually use it), the former sounds like a prime way for phishers to get access in the first place. It will be interesting to hear the hows and whys of what makes access suspicious - if Wells plans on tracking IP addresses and using cookies, I suspect the whole thing is going to be a big pain in the butt in our mobile/wireless, browser cookie blocking world.