Scoop This first reported that Citigroup bought Wachovia Bank.

Those reports were premature. The new report is that Wells Fargo bought Wachovia Bank for $15.1billion.

Breaking News…

Developing…

UPDATE 1:

NEW YORK (AP) — In an abrupt change of course, Wachovia Corp. said Friday it agreed to be acquired by Wells Fargo & Co. in a $15.1 billion all-stock deal, wiping out Wachovia’s previous plan to sell its banking operations to rival suitor Citigroup Inc.

A key difference is that the Wachovia deal will be done without government assistance, while the Citigroup deal would have been done with the help of the Federal Deposit Insurance Corp.

“This deal enables us to keep Wachovia intact and preserve the value of an integrated company, without government support,” Robert Steel, Wachovia’s president and chief executive, said in a statement.

The Wachovia-Wells deal, announced Friday, comes in a turbulent time for banks and financial firms as they grapple with the ongoing credit crisis, which led to the recent bankruptcy of Lehman Brothers Holdings Inc. and the failure of Washington Mutual Inc.

I believe this is a good deal for Wachovia Bank because they get to keep their identity as a bank, and more importantly, Wachovia employees will most likely keep their jobs. Just as important, Wachovia customers will most likely stay with the bank. Earlier this year there was a “silent” run on Wachovia, meaning that customers were pulling hundreds of millions of dollars from Wachovia Bank.

UPDATE 2: Fox Business Network is reporting that Citigroup is going to protest the Wells Fargo-Wachovia deal. Citigroup believes that their deal was legit and complete.

UPDATE 3: The FDIC is going to review both deals. Citigroup says that it has exclusivity to Wachovia’s banking operations. It looks like there could be a court battle.

This is not boding well…

UPDATE 3: Wall Street Journal

The Wachovia/Wells Fargo deal comes four days after Wachovia and Citigroup reached a $2.16 billion agreement in principle to sell its banking operations to Citigroup.

Citigroup executives, blindsided by the Wells Fargo agreement to buy Wachovia, are considering filing a lawsuit against the two banks and also may sweeten their bid for Wachovia, according to a person familiar with the matter.

Citigroup is accusing Wachovia of breaching the “exclusivity agreement” between the two banks. The New York banking giant, which hoped to gain access to Wachovia’s deep well of deposits, is considering its legal options, including suing Wachovia for breach of the exclusivity pact and suing Wells Fargo for tortuous interference, the person said.

In a statement, Citigroup “demanded that Wachovia and Wells Fargo terminate and not proceed with any proposed transaction, any conduct in furtherance thereof, or any other act in violation of the Exclusivity Agreement. Citi has substantial legal rights regarding Wachovia and this transaction.”

Citigroup executives also believe that federal banking regulators may intervene on their behalf to block the Wachovia-Wells merger, this person said. A spokesman couldn’t be immediately reached for comment.

Great. Just what the economy needs.

John McCain was the only Presidential candidate to come back to Washington D.C. on his own accord. And now, he gets bragging rights. McCain showed leadership in a time of crisis and lived up to his campaign promise and life commitment - Country First.

Also, McCain came back to Washington D.C. to work and get this financial deal through, while the Democrats played games with the vote, and Barack Obama proved why he is not ready to lead.

Hat Tip: Hot Air

Honestly, can you afford new taxes? If you can, will you pay mine? Barack Obama wants to fund wasteful government programs and international funds with our money - $1 trillion of our money! But Obama says we will get a $1,000 tax refund. Nice. If you are a single person, that is enough for one month’s worth of living expenses.

As I have continuously posted, Obama’s tax increase plan is targeting entrepreneurs and small business owners. These business owners cannot afford to fund Obama’s proposed government programs. Doing so would mean that these business owners will have to fire employees, and perhaps curtail their business expenses, such as maintenance and company outings, in order to pay their taxes.

Hat Tip: Hot Air

Worst point drop ever!

The Dow dropped 777.68 points!

Oil dropped $11.31 to $95.58 per barrel!

Gold shot up $22.80 to $911.30 an ounce!

Breaking News…

Developing…

UPDATE 1: JPost.com

Oil slides $10 a barrel on weak demand outlook

Oil prices have fallen more than $10 a barrel as worries that a US bailout plan won’t win legislative approval increase fears of a prolonged economic downturn.

Monday’s steep decline came as House lawmakers were voting on the $700 billion rescue plan. Analysts say if the plan fails to win approval and the economy weakens further, consumers and businesses around the globe would likely cut back on energy use even more.

Light, sweet crude for November delivery briefly dropped $10.01 to the $96.88 level on the New York Mercantile Exchange. Prices quickly pared some losses, rising to $98.22 a barrel.

The Dow Jones and Oil prices continue to fall…

Developing…

UPDATE 2: It looks like the Dow Jones will settle at 10365.45 points. The Dow has fallen 777.68. This is worse than when the Dow fell 710 points on September 17, 2001, the first day the markets opened after 9/11.

Gold shot up $22.90 to $911.40 an ounce.

Oil is down $11.33 to $95.60 per barrel.

UPDATE 3:

WASHINGTON - In a stunning vote that shocked the capital and worldwide markets, the House on Monday defeated a $700 billion emergency rescue for the nation’s financial system, ignoring urgent warnings from President Bush and congressional leaders of both parties that the economy could nosedive without it. The Dow Jones industrials plunged nearly 800 points, the most ever for a single day.

Democratic and Republican leaders alike pledged to try again, though the Democrats said GOP lawmakers needed to provide more votes. Bush huddled with his economic advisers about a next step. The House was to reconvene on Thursday instead of adjourning for the year as planned.

The stock plunge began even before the 228-205 vote to reject the bill was officially announced on the House floor. The decline for the day surpassed the 721-point previous record, on the day after the Sept. 11, 2001, terror attacks, though in percentage terms it was well short of the drops on Black Monday of October 1987 and at the start of the Depression.

If you have 401k plans, as well as IRA and Roth IRA accounts, please do yourself a favor and do NOT check these accounts. Save yourself the heartache and wait until the market goes back up.

UPDATE 4: The Dow Futures are already down 600 points.

Wachovia Bank failed at 8:19am this morning, though the FDIC is challenging that claim. Citigroup has bought Wachovia Bank and has officially taken over operations at Wachovia. The FDIC has insured all Wachovia accounts up to $100,000.

Citigroup will buy Wachovia’s banking operations; FDIC says Wachovia didn’t fail.

NEW YORK (AP) — In the latest byproduct of the widening global financial crisis, Citigroup Inc. will acquire the banking operations of Wachovia Corp. in a deal facilitated by the Federal Deposit Insurance Corp.

Citigroup will absorb up to $42 billion of losses in the deal, with the FDIC covering any remaining losses, the government agency said Monday. Citigroup also will grant the FDIC $12 billion in preferred stock and warrants.

The deal greatly expands Citigroup’s retail outlets and leaves it among the U.S. banking industry’s Big Three along with Bank of America Corp. and J.P. Morgan Chase & Co.

The deal comes after a fevered weekend courtship in which Citigroup and Wells Fargo & Co. both were reportedly studying the books of Wachovia, which was suffering from mounting mortgage losses linked to its ill-timed 2006 acquisition of mortgage lender Golden West Financial Corp.

The FDIC asserted that Wachovia didn’t fail, and that all depositors are protected and there will be no cost to the Deposit Insurance Fund.

If you have a Wachovia account, close it, and go somewhere else. I recommend Bank of America.

Why do they each owe me $100 you might ask? Well, I just purchased a dump truck load full of garbage which was promptly delivered and dumped in my front yard in the hopes that I could dig through it and find stuff to sell in order to get a return on my investment. The problem is, I found nothing worth selling in the pile of garbage and now, I don’t have any money to pay people to haul it away!

Just look at this mess:

The way I see it, if I hire people to clean up all this trash, I’m doing my neighbors a huge favor! The problem is, I don’t have the money to hire people because I spent all I had on making the mess. If my neighbors don’t pay to help me clean it up, their property values will start to go down. After all, nobody is going to buy a house in a neighborhood with a garbage dump!

Pretty absurd, don’t you think? If you find my story absurd then you’ll fall over dead over what inspired me to write it which is the mentality of the CEOs currently asking the Government (ie “taxpayers”) for assistance to bail out their failed companies under the guise that if we don’t, the economy will suffer. Right now, the Bush Administration is asking for 700 Billion Dollars to help these companies and and all indicators show that congress is about to comply.

Now… if there are roughly 300 million Americans, that means each of us will be paying $2333 with interest to “bail out” these failed companies and people who took out loans they couldn’t afford. This is money we will all have to pay, one way or another, even if we had nothing to do with the mistakes that were made!

I am thankful that my congressman, a Republican named “John Carter” has thus far stood opposed to these bailouts but it appears that there won’t be enough congressmen like him to stop this bill. I am especially happy that he’s standing against this bill because I left him numerous voicemails demanding the exact stance he’s taking now and I advise all of you to call your Congress and ask for the same thing.

If the American population is truly paying attention to what’s going on, these next few days should be crucial in deciding which politicians keep their jobs and which should get thrown out. Our “heros in Washington” seem to think that a temporary measure that will temporarily delay the inevitable is going to pacify the electorate even if it means taking $2333 from each an every one of us.

We need to watch John McCain, Barack Obama, our congressmen, and our Senators to see how they vote on this “bipartisan rape” of our wallets. If they vote “yes” on this bill, see to it that you vote “yes” for their non-incumbent opponents in November.

In crisis, experience matters. McCain and his Congressional allies led. Tough rules on Wall Street. Stop CEO rip-offs. Protect your savings and pensions.

Obama and his liberal allies? Mum on the market crisis. Because no one knows what to do.

More taxes. No leadership. A risk your family can’t afford.

John McCain responded quickly to this mortgage crisis, saying that he will back President Bush’s plan to bailout banks, but also saying that greater regulation and oversight is needed. Banks do not need a blank check. Plus, McCain has said that there needs to be a specified limit on how much a CEO and other top management executives can receive from the federal assistance check. Barack Obama stayed silent on this issue. Obama did not outline a plan to help in this crisis, but went on to chastise President Bush and Republicans for causing it. Obama conveniently forgot his ties to former Fannie Mae executives Franklin Raines and Jim Johnson, who both had a large hand in causing this crisis.

This is not the first crisis McCain has shown his true leadership. When Russia invaded Georgia at the start of the Olympics, McCain was out in front condemning Russia and calling for the immediate withdrawal of Russian troops from Georgian territory. Before departing for his Hawaiian vacation, Obama made a statement calling for Georgia to end the violence! What? Obama inadvertently accused Georgia of starting the violence against Russia! Obama had to make another statement as soon as he landed in Hawaii to call on Russia to withdrawal from Georgia. Then, Obama went to see his typical white grandmother and boogie-board at the beach.

Hat Tip: Hot Air

From John McCain’s official website:

For Immediate Release
September 19, 2008
Contact:

Reforming Our Financial Markets — The Mortgage And Financial Institutions Trust

Today, In Wisconsin, John McCain Outlined His Plan To Reform Our Financial Markets.

To ensure that people are able to stay in their homes and safeguard the life savings of Americans by protecting our financial system and capital markets, John McCain is calling for the formation of a Mortgage and Financial Institutions Trust (MFI). The MFI will be a vital element in managing the current financial crisis.

The Purpose Of The Mortgage And Financial Institutions Trust (MFI):

The MFI Is An Early Intervention Mechanism That Will Help Financial Institutions Avoid Bankruptcy And Expensive Bailouts While Protecting Their Customers.

The MFI will minimize the use of taxpayer money by having an orderly process to address the market crisis. Working with the private sector and regulators, the MFI will help identify troubled institutions and take action to strengthen them before they become insolvent.

The MFI Will Provide Troubled Institutions With An Orderly Process To Identify Bad Loans, Provide Funding And Eventually Sell Them At A Profit.

This will get the Treasury and other financial regulators in a proactive position instead of reacting to one troubled institution after another.

The Structure Of The Mortgage And Financial Institutions Trust (MFI):

The MFI Will Be Part Of The U.S. Department Of The Treasury.

The MFI will be managed by a board of directors consisting of at least the Secretary of the Treasury, Federal Reserve Chairman, Chairman of the FDIC and two public members. The Secretary of the Treasury will be Chairman of the Board. Under the MFI process:

Troubled institutions will voluntarily come to the MFI.

The MFI will provide liquidity loans at reasonable interest rates.

The MFI will receive warrants for controlling interest in troubled institutions.

Troubled financial institutions that enter the MFI will keep operating as private companies with the help of the MFI.

The MFI will supervise the sale of loan assets at market prices and purchase them as necessary.

The MFI will eventually, and at its discretion, sell the loans to the private sector.

The MFI will have a predetermined tenure during which to dispose of the loans.

The MFI will return all profits to the U.S. Department of the Treasury and taxpayers.

Not sure if I can embrace this plan, but it’s better than what they’re doing now for sure.

Bush Requests $700 Billion for Bailout

posted:19 MINUTES AGOcomments: 47

filed under: National News, Political News

AP

In the largest financial intervention since the Great Depression, the Bush administration seeks wide-ranging powers to purchase bad mortgages and take over failing banks. Democrats insist the plan address the needs of homeowners facing foreclosure. Officials hope to finalize a plan by Monday morning, and pass it by week’s end.

You heard that right folks, $700 Billion Dollars of Your money is about to pay for the faulty business decisions of banking CEOs who will still collect huge salaries and will not go to jail. Your tax dollars may also go towards owners of foreclosed homes, who took out loans that they couldn’t afford to pay back. The lesson here is, if you screw up enough, instead of having to suffer the consequences, the government will bail you out using other people’s money.

President Bush and Congressional leaders are taking one more step toward nationalizing the banking system. What they should be doing is re-enacting the Glass-Steagle Act of 1933 which was repealed in 1999 when President Clinton signed the Gramm-Leach-Bliley Act (GLBA) into law. While the FDIC Insurance for bank accounts provision of Glass-Steagle was preserved by GLBA, what was not preserved and specifically repealed was the prohibition which kept a single bank from offering investment, commercial banking, and insurance services under the same corporate umbrella.

GLBA essentially wore away the reforms and the regulation that was designed to PREVENT the conflicts of interest and corruption that caused the banking collapses which sparked the Great Depression. It was the wrong kind of deregulation and it is the reason we’re in this pickle today.

For the record, 90 Senators voted “for” GLBA and among them was Senator Joe Biden who is now running for Vice President under the guise that “Republicans” are completely to blame for this mess. Unfortunately, John McCain was not present at the time the act was passed and thus, did not cast a vote. I’ll bet he’s wishing he did now though. I’m wishing he was opposing this recent bailout instead of calling it an “unfortunate but necessary step.” While Communism is “unfortunate,” it is never “necessary.”

If you are against your tax dollars being used to nationalize industries, please do not hesitate to let your congressman know. If your congressman votes for this bailout or votes “present,” consider writing in “present” on your ballot this November. I’m really torn right now but I just might be doing voting “present” instead of voting for John McCain this year if he doesn’t come out more strongly against this and future bailouts.