Monday, October 6, 2008

Wachovia's the baby and the government King Solomon

Posted By on Mon, Oct 6, 2008 at 10:22 AM

Split the baby in half is what they were going to do in Bible.

The Federal government must have missed that story--because it didn't work.

Now the Feds expect Citi and Wells Fargo to split Wachovia? Seems like the government ought to go back to separating church and state because this biblical declaration is just stupid.

According to the Associated Press, over the weekend there has been a lot of legal wrangling going on:

Under the plan discussed Sunday night, the Journal said, Citigroup would get the Charlotte, N.C.-based bank's Northeast and mid-Atlantic branches, while Wells Fargo would get branches in the Southeast and California and Wachovia's asset management and brokerage units.

The Sunday night talks are expected to resume Monday, the Journal said.

A call to the Fed for comment was not immediately returned.

Early last week, Citigroup agreed to buy Wachovia's banking assets for $2.1 billion in a deal brokered by the Federal Deposit Insurance Corp. But then on Friday, Wells Fargo announced that it had agreed to acquire Wachovia in a deal worth $15.1 billion at the time, or $14.8 billion based on Wells Fargo's closing price Friday of $34.56. Wells Fargo's deal did not require any government support.

It seems to me that a deal that doesn't require government support should be chosen. Aren't taxpayers on the hook for enough money as it is? $700 billion? And do we really think that greedy-ass businesses are going to split the baby? Citi and Wells Fargo see something they want in Wachovia and I doubt either will be happy with just half (or less).

And if the goal is to save jobs, why not go with Wells Fargo? Why not do the right thing? Oh, I forgot, this ain't the bible.

And the government isn't as wise as King Solomon was.

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