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September 26, 2008
Super Banks Arise from Rubble
Posted by Jack
"Forced mergers are adding to the ranks of the U.S. superbanks, with Wachovia Corp. talking to bigger rival Citigroup Inc. about a combination after taking a pounding in the stock market, and JPMorgan Chase & Co. swallowing the assets of Washington Mutual Savings Bank after that lender imploded." Wachovia shares plunged on Friday, at one point down over 34%, but rallied back toward the close. After hours trading caught wind of the proposed merger between Citi and Wachovia; both stocks took off. Look for them to make big gains on monday, especially if a banking bailout deal is announced. Wachovia was trading low $9 and just days ago it had hit as high at $22.45! When big bank stocks trade wildly like the former "dot.coms" you know the financial world is in the process of a whole new era...and it looks like the world now belongs to the new Super Banks!
The Wachovia Corporation was formed through a series of mergers over the years that not only made it one of the country's largest financial institutions, but earned it a reputation as an acquisition machine. In 2006, it bought Golden West Financial, one of the last major independent banks on the West Coast, in a $26 billion deal. In May 2007, it swallowed up A. G. Edwards in a $6.8 billion deal that made Wachovia Securities the country’s second-largest retail broker after Merrill Lynch.
Posted by Post Scripts at September 26, 2008 9:58 PM
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The Brits solution:
UNITED NATIONS (AP) -- British Prime Minister Gordon Brown called Friday for "a new global financial order" to resolve the financial crisis currently roiling world markets. *** In his address before the U.N. General Assembly, Brown said the world was facing the "first real financial crisis" of the global era and that it required an international solution. *** "The international institutions created in the aftermath of World War II have not kept pace with the changing global economy. We need national regulators to be cooperative, rules and principles to be consistent and international movements of capital to be transparent," Brown said. *** He said the immediate priority was to stabilize financial markets and then work to rebuild the world financial system around clear principles, including increased transparency, regulation, responsibility and global oversight of international capital flows. *** "For we must build a new global financial order founded on transparency, not opacity, rewarding success not excess, responsibility, not impunity, and which is global not national," Brown said. "We must clearly state that the age of irresponsibility must be end." *** Britain is dealing with the current credit crunch by making over $184 billion available and extending a special liquidity scheme until the end of Jan. 2009, Brown said. *** The country also has placed a temporary ban on short-selling.
Posted by: Tina | September 26, 2008 11:36 PM