Subscribe to this blog's feedEarlier this week, as you know, Bob, Citi and Wells Fargo were almost at daggers drawn over who would walk away with Wachovia.
“We saved Wachovia from collapsing,” Mr Pandit said, according to people who were present. “We have to be compensated for that. That is like somebody buying a $2 ticket, winning $10 . . . and somebody says, ‘I am going to come and steal it away from you for two-and-a-half bucks.’ ”(You tell 'em, Vikram.)
Now? The ardour seems to have cooled. Now that both suitors have had a chance to go through the books, they're starting to think twice, Yves Smith says.
Wachovia is looking less desirable than it once did, now that both sides have dug deeper as a result of the negotiation process, further complicating achieving a quick resolution.This is increasingly looking like the FDIC will wind up with egg on its face. They do not want Wachovia hanging in the breeze, and a retraded deal may leave the FDIC back at square one in terms of its support for a transaction, or in a worst-case scenario, they may wind up taking control of the bank.
After burrowing deeper into Wachovia's books, Citigroup and Wells Fargo have been surprised by the concentration of assets they regard as low-quality, these people said.As a result, both banks are worried that buying even part of Wachovia could saddle them with steeper losses than previously expected.
