The consolidation of financial power continues

From the New York Times:

In a surprise twist, the West Coast bank Wells Fargo & Company, said Friday that it had reached an agreement to acquire a rival, the Wachovia Corporation, for about $15.1 billion in stock.

The announcement came just four days after Citigroup had agreed to buy Wachovia’s banking operations of Wachovia for $2.2 billion of about $1 a share. But Wachovia, which is based in Charlotte, N.C., has now apparently rejected that deal in favor of one where the entire company would be acquired. How Citigroup will respond to the news remained a question Friday morning.

In a statement, Wells Fargo, which is based in San Francisco, said that the deal required no assistance from the Federal Deposit Insurance Corporation or any other government agency.

[My emphasis. – NPO]

Well, a merger is a merger is a bad thing, but that the government has its hand in one fewer act of concentration comforts me slightly. We’ll see how Citigroup reacts. I doubt that any response will surprise me; I cannot help but to suspect that Citigroup will express displeasure, maybe even try to draw Uncle Sam back into the situation, further revealing how little corporate America actually believes in the free market.

Update: Yep, Citigroup opposes — and so do the damned government regulators:

Federal Deposit Insurance Corp. Chairman Sheila Bair said Friday the agency “stands behind its previously announced agreement with Citigroup.”

The FDIC will review all proposals and work with the regulators of Wachovia, Citigroup and Wells Fargo “to pursue a resolution that serves the public interest,” Bair said.

How the hell can she — with a straight face, I’m sure — stand behind the Citigroup agreement and then have the audacity to suggest that she wishes to resolve the matter in a manner that “serves the public interest”? Want to serve our interest? Stop spending “government money” (NEWS FLASH: THE GOVERNMENT HAS NO MONEY; IT’S OURS!) on buyouts, period. Especially when a private entity wants to make the acquisition without dipping its hands into public coffers. Why is this so fucking hard to comprehend? I just don’t understand how this can be. I’ve never been one to resort to Reagan too often, and certainly rarely find myself wishing to praise him, but right now, this seems to be ridiculously on-point:

The nine most terrifying words in the English language are, “I’m from the government and I’m here to help.”


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