The key point is:
Citigroup and Wells Fargo are unlikely to bid more than a few dollars for share for Wachovia, whose shares closed Friday at $10, the newspaper said. It is unclear whether Wachovia would be sold as a whole or be broken up, or how much Wachovia bondholders might lose in any transaction, it said.
Given the JPM/WM bailout model, the stronger banks (like JPM, BAC, WFC) know that the FDIC will swoop to shut down the bigger dodgy banks, because they don't want to drain the FDIC fund.
So when C and WFC are said to be in a bidding war, it's a war over paying $2 or $3, as opposed to $12 or $13.
Citigroup and Wells Fargo are unlikely to bid more than a few dollars for share for Wachovia, whose shares closed Friday at $10, the newspaper said. It is unclear whether Wachovia would be sold as a whole or be broken up, or how much Wachovia bondholders might lose in any transaction, it said.
Given the JPM/WM bailout model, the stronger banks (like JPM, BAC, WFC) know that the FDIC will swoop to shut down the bigger dodgy banks, because they don't want to drain the FDIC fund.
So when C and WFC are said to be in a bidding war, it's a war over paying $2 or $3, as opposed to $12 or $13.
Quote from Trad'nUp:
So now, Wells Fargo and Citi are fighting over WB as reported tonight.
"The U.S. government, led by the Federal Reserve and the Treasury Department, are also involved in the talks, the newspaper said. The government is resisting guaranteeing some of Wachovia's assets, as it did for Bear Stearns when it engineered that company's sale to JPMorgan Chase [JPM 48.24 4.78 (+11%) ], and is also opposed to taking over Wachovia unless its financial position deteriorates more rapidly."
Seems their situation is not quite what they've been saying it is. Or the media is embellishing. Either way,
http://www.cnbc.com/id/26932143
