Wachovia Bank News - Wachovia Bankrupt

Well it seems that Wachovia is about to fail too. We reported on this a while back as Wachovia was reported to be on the FDIC list for banks at potential for failure. They where also reported to be in talks with Morgan Stanley to merge Wachovia and Morgan Stanley into a single entity. Apparently that potential merger did not plan out as Wachovia is now in talks with three different suitors to acquire the troubled bank.

The three suitors now are Banco Santander, Wells Fargo or Citigroup. This news comes on the heels of the failure of WaMu which was seized by the FDIC last night and sold to JP Morgan for pennies on the dollar. Many anaylsts have thought Wachovia had a risk of failing and the Wamu failure has just highlighted Wachovia’s issues.

A failure of Wachovia would place even more pressure on the congress to actually do something about the credit crunch the economy is facing. Many people are expecting a total collapse of the economy if something is not done soon to shore up confidence in the market. I was anticipating a large fall today of the market and initially is was looking weak at the open and it was. The president coming out this morning and saying that a deal would get done on the bailout bill they just needed to work out the specifics of what that deal looked like. This action probably gave the market a stay of execution for today, but if there is not some real progress this weekend then the time for talk may be over and a massive sell off of the stock market could begin.

We have seen a lot of banks fail this year which has put a strain on the FDIC system and this Wachovia news does not really help the fear that we may still see a lot more banks fail before this is all over. Burying that mason jar out back is looking better and better as more banks such as Wachovia start to look weaker.

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