So will it pass?
My gut says yes. After all, the news that 159,000 people lost their jobs in September has to provide some motivation, right? But given the number of add-ons reportedly being appended to the bill, you never know.
As I sit here pondering the blood bath that could occur if this thing doesn’t pass, Japan is in the red, Europe is a mixed bag, and the Dow and S&P are up.
Wachovia (WB)
Change of plans: On September 29th, it was reported that Citi (C) was going to buy Wachovia’s deposits. The FDIC was reportedly in the game too, set to cover certain losses in Wachovia’s loan portfolio "in exchange for $12 billion in Citigroup preferred stock and warrants.” Flash forward to today: The new scoop is that Wells Fargo (WFC) and Wachovia are planning to combine forces in a $15 billion stock deal. All things considered, it looks like a good deal for Wachovia shareholders, since it values the company at about $7 a share, well north of yesterday’s closing price.
If I were long the stock here and hadn't already booked a tax loss in disgust, I’d probably bail at this point.
To be clear, I think that Wells Fargo shares could ultimately put a little more jingle in Wachovia shareholders' jeans, to borrow a line from Professor Toddo. And hey, being partners with Berkshire (BRK-A), which owned almost 9% of the shares as of June 30th, sounds pretty good. But again, I’d probably head for the door.
As an aside: it looks like Citi is off in pre-market trading. I do wonder if it won’t cut its dividend now, since its deal with Wachovia is no longer apparently on? Something tells me that some of Citi’s lawyers are probably going to have something to say about this.
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