“On Monday, Citbank made a bid for the banking portion of Wachovia for $2.1 billion (excluding the investment and asset management divisions), with the FDIC to take over the mortgage portfolio. At that time, Citi signed an exclusivity contract with Wachovia.

Because they needed more time to conduct due diligence on the entire operation, Wells subsequently made a $15 billion bid on Wednesday for all of Wachovia’s assets, including all their bad paper with no governmental assistance.

Citi is arguing that because they have an exclusivity contract, Wells’ offer should not be considered. The FDIC appears to have no problem with continuing their partnership with Citi in the matter, even though Wells has made an alternative bid that would not call for the FDIC intervention.

To me, this is a very interesting and troubling development. In essence, we have the Treasury Department, in part through an intermediary, bidding on the assets of a corporation in competition with a private company.

It is my understanding the role of the FDIC is supposed to protect the assets of individuals in the event of a failure. In this case, we have the FDIC acting to take ownership of assets when private sector alternatives are available. In other words, we have the Treasury Department in competition with the market without equal access for competition.

I’m not sure I’m real comfortable with that…” Spike

This is his blog http://worldsofspike.blogspot.com/ commentary on the political futures market.

Without it the economy risked very severe damage, With it we have a somewhat but unknown reduced risk of very severe damage. There is a not small chance that it will make the credit markets for Main Street worse, in order to protect the financial industry. My only hope that such a scenario does not unfold, and it slows the damage to the economy done until Feb 2009. If McCain is elected, or Obama loses his nerve, then we are lost. We will be Japan in the 1990s, excpet much worse.

My comment was not meant to be an endorsement of the stinko bill passed today.

So… good luck to us.

http://www.youtube.com/watch?v=HaG9d_4zij8

First, game the military situation so that if Obama actually does bring all the troops home, there will be major trouble in the Middle East.

Second, suck so much money out of the economy that Obama won’t be able to enact any of the special programs he wants, like health insurance. The Republican Mantra, as our dollars disappear into the sands of the Middle East and into foreign banks, is that “we can’t afford it.” They want to tie Obama hand and foot so that in 2012, a refurbished Republican party, lead by a rehabilitated Sarah Palin, Bradley Schlozman, Monica Goodling, Alberto Gonzales & all, can run on a ticket of Obama’s “failures.”

Bob in HI

My sense is that Obama felt that he had no choice than to get this bail out if he wanted any kind of government at all to govern.

George W. Bush has bankrupted every company he has ever worked for starting with Arbusto and finishing up with the United States of America. He and his administration are incompetent or don’t give a damn or both.

This may be (Cynthia may be) an exceptional case, but it really is SO important to get info from local people who know the turf and the terrain before embracing someone.