No, we're not kidding. Wells Fargo apparently found a sympathetic ear in U.S. District Judge John Koeltl, a former Watergate prosecutor and Clinton appointee. Backatcha, Citi!
U.S. District Judge John Koeltl late Sunday blocked an order by New York State Supreme Court Justice Charles Ramos issued late Saturday at the request of Citigroup Inc. The New York bank announced on Sept. 29 that it had received federal government backing to acquire the banking assets of Wachovia Corp. for $2.1 billion, or the equivalent of about $1 a share.
Interesting times.
And if that's not enough drama, the Wall Street Journal is reporting that the Fed is totally sick of Citi and Well's shit already. So Citi and Wells are locked in a room today, with instructions not to come out until they can divide up the back seat of the family Volvo equitably. And if there is any more shit, Dad is totally turning this car around right now!
Judge Tilts Fight for Troubled Wachovia Toward Wells Fargo [Fox News]
Posted by guest , Oct 05, 2008 9:33PM
What is it with North Carolina companies?? First RJR, now Wachovia. Must be a Winston Salem thing......
Posted by guest , Oct 05, 2008 9:34PM
However I doubt we will get any Barbarians at the Gate.
Posted by bonddaddy , Oct 05, 2008 9:35PM
high comedy
even if they split it up WFC still wins - and the WB shareowners lose
Posted by guest , Oct 05, 2008 9:39PM
Funny, I picture The Beard being in the front passenger seat and The Bald driving...
No surprise this went into Fed court...too big and too far reaching to be handled in state court.
And you've got parties based all over the place...
WLRK knows what they are doing. Does anyone know if they are the only law firm advising WFC or is there another firm.
The blood is in the water and the sharks are swimming!
-- Santini
Posted by guest , Oct 05, 2008 9:40PM
There's also a comment in the WSJ that a NY state appeals court has set aside Judge Ramos' order - because of serious questions of his ability to issue the order while not present in the state.
That did seem pretty fishy to me - that a judge holds an ex parte hearing at his home in another state and issues a restraining order?! Is this common practice?
Posted by guest , Oct 05, 2008 9:46PM
I don't care how ridiculously brilliant most of us think we are, the absolutely sillyness of the past two weeks is indicative that no one has any idea what the hell is going on in the markets.
Politicians try to pass the most sweeping legislation this century and fail on the first attempt only to shock the market. CitiWachFargo is like a scrum of angry squirrels.
If I had to pick lawyers on this one, I'd side with WLRK in being able to move this case in their client's direction.
Posted by Investorcluzo , Oct 05, 2008 9:50PM
this is a $hit show. seriously, once the politicos weigh in, I'm sure the taxpayers (and wfc) will win out. if they split the co up, would that mean c has to pay a higher price or would wfc pay a lower one? you can't have the suitors valuing the co at different prices. Further, if they valued the pieces separately, there could be some unintended consequences for marks on other banks’ books.
entourage in 10 min, please don't tell me there's going to be a conf call tonight...
Posted by guest , Oct 05, 2008 10:01PM
@7...fuck it. All that matters is Ari and Johnny Drama now.
Posted by guest , Oct 05, 2008 10:03PM
@6
knowing what is going on and making money are not the same thing. The reality is no one ever knew what was going on they only pretended too and convinced themselves of the pretense. That being said, whenever there is massive capital reallocation, there is opportunity, especially when the former allocators are dropping like flies.. Whoever is writing CDS on treasuries has got a real racket going, for one example.
Posted by guest , Oct 05, 2008 10:13PM
Back in the good ol' days, Volvo back seats had a huge arm rest you could pull down, and so dividing up the back seat equitably was never difficult.
It was fighting over who got to put their arm on the armrest that pissed off Dad.
Posted by guest , Oct 05, 2008 10:19PM
Koeltl's involvement is perplexing. Federal judges are constrained by Younger Absention doctrine from ruling on a case when there is a parallel proceeding in state court. None of the exceptions, at least to my knowledge, even apply here, i.e., irreparable injury, which really only applies in criminal cases.
Posted by guest , Oct 05, 2008 10:41PM
a must read:
http://www.washingtonpost.com/wp-dyn/content/article/2008/10/03/AR2008100301042.html?sub=AR
Posted by guest , Oct 05, 2008 10:58PM
I've got to believe this will all be resolved by market open tomorrow, with things being broken up. Nobody has any interest in a protracted battle. And Citi is in a world of hurt if they can't get their hands on some of Wachovia's deposits.
Posted by guest , Oct 05, 2008 11:03PM
11, are you stupid? Assuming you took a business and law course, and not a JD. Wells, Citi, Wachovia, New York, North Carolina, and California, Federal regualtion, fdic issues, and you think the federal courts ruling is perplexing.
What an idiot you are.
Posted by bmwstox , Oct 05, 2008 11:09PM
Citi is trying to steal Wachovia for an insulting $1 a share offer using taxpayer money..that is some nerve. Isn't it enough that the average citizen is getting sodomized by the US gov.? Now multi-billion corporations that are run poorly are standing with their hands out to have the gov. assist them in raping banks and creating fear out of nothing.
Posted by guest , Oct 05, 2008 11:11PM
who knows a credit union in small town Iowa will buy Shitty Group or
Wells should buy Count Dracula Pundit's Shitty group instead.
Posted by guest , Oct 05, 2008 11:16PM
Wawa or 7/11 should buy Citi group.
Steven's Steakhouse should by Citi group
Anne's Beauty parlor should buy Citi group
David's Hotdog Stand should buy Citi group
That Nigerian guy who sent me email that he owns $450 million should buy Citi group.
Posted by guest , Oct 05, 2008 11:56PM
Tim Sykes owns you
http://www.covestor.com/mbr/timothysykes
-(Not tim sykes)
-(Seriously, not tim sykes)
Posted by guest , Oct 05, 2008 11:57PM
Citi and FDIC need to pick up their balls and bats and head home. they got their asses hand to them...
3 weeks until FDIC has to rescue Citi....
Posted by guest , Oct 06, 2008 12:41AM
@18
Haha. Tim Sykes owns all you shops.
Posted by guest , Oct 06, 2008 3:16AM
It's me, the one and only. I 'll be here for the next few weeks taking questions and helping those in need. Just give me a shout out and let me know what's on your mind.
Baby Jesus
Posted by guest , Oct 06, 2008 7:18AM
Hey, What is happening in ICELAND ?
Anyone has any updates .
I am hearing they have stopped STOCK MARKETS ? (like Russia) ?
Posted by guest , Oct 06, 2008 8:49AM
@19, Completely agree. The Citi deal has smelt odd from the start. This talk about splitting up Wachovia is a complete joke. I wouldn't be surprised if the employees and customers revolt against Citi should they get any piece of the pie.
Posted by guest , Oct 06, 2008 9:58AM
If the Wells Fargo deal goes through, the American taxpayer will cut a check through a tax shield for $25 billion ($74 billion in income sheltered @ 35% tax rate). So in essence, the American taxpayer gives Wachovia to Wells Fargo ($15.1 billion) plus an extra $10 billion over the top.
The split is actually the best option for taxpayer then neither firm can take the tax shelter. Classic Game Theory, Prisoner's Dilmenia.
Wells Fargo Wins/Citi Loses: Gets Wachovia + $10 billion
Citi Wins / Wells Fargo Loses: Gets Guarantee but pays $12 billion for it
Citi and Wells Split: No guaratee, no tax shelter - Wachovia shareholders and Taxpayers win
Expect Wells to fight tooth and nail to buy the whole of Wachovia to the point of idiocy.
Posted by guest , Oct 06, 2008 10:22AM
@14: JD. The federal ruling is perplexing because it runs counter to Younger abstention doctrine, at least according to the facts that are public, and assuming one of the parties actually raised the argument.