One of the big political drivers for the bailout was the supposed weakness of the banking sector, in particular Wachovia, which needed a government-backed merger with Citigroup to avoid failing.
Except that Wachovia didn’t need the government or Citigroup after all (Washington Post, emphasis added):
Wachovia will snub Citigroup and jump into the arms of Wells Fargo instead, upending a government-arranged rescue of the troubled bank in favor of a more traditional merger, the companies announced this morning.
The new deal pays Charlotte-based Wachovia shareholders $15.1 billion instead of the $2.2 billion offered by Citigroup. Wells Fargo also said it will not need a government backstop, something Citigroup had demanded.
In other words, the supposed poster-child for a banking sector deserpately desperately (Thanks, Kat) in need of government help managed to make a better deal for its stockholder without government help.
So why do we need the bailout again?
Cross-posted to the Republican Liberty Caucus of Virginia
October 3, 2008 at 9:53 am |
[...] This? The Free Market Taking Care of Banking Crisis? Posted on October 3, 2008 by Hirons Right-Wing Liberal nails it! And I couldn’t agree [...]
October 3, 2008 at 10:01 am |
[...] Cross-posted to the right-wing liberal [...]
October 3, 2008 at 10:10 am |
I called Congressman Virgil Goode’s office yesterday…
and it looks like I’ll be doing it again today. I need to reiterate my desire that he holds the line and continues to vote “NO” on this socialistic-porker-invasive “bailout” bill. Yesterday, I saw that my bank, Wachovia (which I like very much; th…
October 3, 2008 at 10:29 am |
Welcome, Deej…
October 3, 2008 at 10:33 am |
The financiers are desperately trying to snooker us again. We, the taxpayers, will never see that money once Congress caves in to special interests, (as usual). If we try to get it back by taxing these businesses, then they will take the good parts of their portfolios and flee to other countries. Suckers!
If we use that money to enhance social security, then all of the retirees that lost their retirement funds in the stock market will at least be guaranteed a reasonably comfortable retirement. (The only ones who will still be unhappy are the ones trying to retire to their mansions.)
Finally! Congress has found the money to make social security work.
Let Congress know that if they get fooled by this bailout, then the only thing for voters to do is punish congress the way it was punished for the gulf war.
Bryant Arms