Wachovia Talking to Citi?
Posted on September 26th, 2008 by HJ
See below… At this point this is just an overly-reported rumor.
But unrelated to this story, Barron’s reported this morning that the pricing for Wachovia to insure certain credit instruments went up 350% literally overnight. I don’t understand the finer details of how these instruments work, but what is clear is this: What it costs Wachovia to acquire lendable capital far exceeds the profit they can make lending that capital out.
This situation is the exact inverse of what a bank does to make money. When you hear about a bank “seizing up” this is what they’re talking about.
Wachovia is going to need a find a way out soon, or their collapse is coming.
Disclosure: No positions.
