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 from Wachovia's $312 billion loan portfolio, with the FDIC covering any remaining losses, the government agency said Monday. Citigroup also will issue $12 billion in preferred stock and warrants to the FDIC.

The deal greatly expands Citigroup's retail outlets and secures its place among the U.S. banking industry's Big Three, along with Bank of America Corp. and J.P. Morgan Chase & Co. But it comes at a cost - Citigroup said Monday it will seek to sell $10 billion in common stock and slashed its quarterly dividend in half to 16 cents to shore up its capital position.

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

Wachovia, like Washington Mutual Inc., which was seized by the federal government last week, was a big originator of option adjustable-rate mortgages, which offer very low introductory payments and let borrowers defer some interest payments until later years. Delinquencies and defaults on these types of mortgages have skyrocketed in recent months, causing big losses for the banks.

The FDIC asserted Monday that Wachovia did not fail, and that all depositors are protected and there will be no cost to the Deposit Insurance Fund.



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Will this new addition to the failed banks raise the numbers for the bail out?

How if anyway will this affect us?

you know you and i can sit here and bytch and moan,but lets face it nothing will become of it,because no one is listening and for those that are ,what can they do to change it ...nothing .i guess we should get use to being our government's cash cow,its funny tho how there is no money for universal health care,no money for social security,but plenty of money to throw away on a war we shouldnt be involved in and money to bail out the greedy,while more and more call the streets their home and the only ones that march in numbers are the illegal aliens..but lets not forget the stimulus check which gave me enough to fill my gas tank up a couple of times and nourish me for a few days so that i may still have the strength to raise my middle finger in protest .....


we are the hungry..the sick and the poor and until we rise up in masses that havent been seen in years our voice singly will go unheard and unanswered.....REVOLUTION

if you expect to see it in your lifetime, I would advise you dont hold your breath...

actually DO hold your breath...

..and what was meant by that comment... quiet..id like to hear what you have to say....now dont be quiet...

I wonder...

The last time I saw an outpouring of such a large portion of the american experiance..

Was during the time of the kent state riots and the overwhelming shout of the american public to withdraw from vietnam.

I just thought it would be cool to see

and the same thing happened then

we got so caught up in the culture war and framed everything in terms of "us vs the them" that we took our eyes off what the global realities were (HoChiMin loved the hippies) and the result were the killing fields of Pol Pot. Of course that didnt affect the hippies so they didnt really care and we never paid much attention to it

Point!

So let us learn from that...

and not make the same mistake.

Not us vs them but...

WE THE PEOPLE. what color is your soul?

and this has what to do with Wachovia?

I bank at United Bank. A nice small local bank with no subprime mortgage to loose money on.

hmmmmm I dunno, give me a minute and I'll figure out some sort of connection

anything yet

and look what happened at kent state that was real DEMOCRATIC...bad example....

Wachovia has an office in South Vietnam.

worse than the US Navy shelling New York City during the draft riots?

I don't know about Wachovia but I wasn't surprised to see WaMu bite the dust. You pay new customers to open checking accounts, you build a LOT of new strip mall banks in a very short time in poor areas, you are rude to customers, you issue indigent seniors credit cards, and you have internal people ripping off the bank it just kind of doesn't surprise me they went under.

Now that a deal for Wachovia is complete, the most troubled of the nation's largest financial institutions have been dealt with. However, the FDIC estimated there were 117 banks and thrifts in trouble during the second quarter, the highest level since 2003. And that number is likely to have increased during the third quarter.

Just a short time ago, Citigroup was under the scrutiny of investors who worried about the possibility of its collapse given its massive exposure to mortgage-backed securities. The New York-based bank has not turned a profit for three straight quarters, and lost a total of $17.4 billion during that period after writing down its assets by about $46 billion. That's the most write-downs of any U.S. bank.

But the government's proposed $700 billion bailout plan could prove to be the deal's silver lining.

..And it could be another case of throwing good money after bad,and what makes any body think this money will be spent any better than lets say oh...the war in Iraq...this government has showed its propensity to throw away our monet instead of taking care of its people..and as the political fat a sses get richer and our poor go hungry and our senior citizens live off of poverty level income while scores go without deceant medical care unless you come from a foreign country ...just like whe they gave the same people we fought in viet nam jobs cars and their kids college educations while our war torn warriors came back to be spit out..now they just choose to spit at all of us while taking hard earn money from our pockets and with promises of not raising taxes they get around this promise by inventing new ones ..and while the proof was given that cigarette companies did lie about the effects of smoking ..trhe government just answered this by taking money from them while the cost as usual was passed to the consumer and the banks instead of giving free toasters charges for every service they can think of..and if technology is so great how come there is an increase in cost ..instead of paper work someone just pushes a button and charges so wheres the cost to them ..those again who are guilty of these lending practices slip away with fat pensions and a home in the bahamas while the consumer pays the price AGAIN...and now just like the war in iraq ...here comes the scare tactics again ..what a fukn JOKE....

unfortunately these banks gambled on the American people. THAT is where all those bad debts went. and the American people weren't reliable to pay their debts and now they are going under because of it