http://www.washingtonpost.com/…

Citigroup has agreed to buy Wachovia bank in a deal brokered by the Federal Deposit Insurance Corporation to avoid another major corporate failure in the midst of the ongoing financial crisis.

The FDIC announced the deal on its Web site this morning. No price for the transaction was included in the announcement. But the FDIC said that the deal hinged on a loss sharing arrangement between Citigroup and the FDIC, the agency responsible for insuring bank deposits.

Wachovia has been saddled by mortgage-related losses. Under the terms of the deal, Citigroup will absorb up to $42 billion of losses on a $312 billion pool of loans. The FDIC will be responsible for any losses beyond that, but was given $12 billion in Citigroup preferred stock and warrants in return for that guaranty.

The FDIC statement emphasized that Wachovia “did not fail,” and that its branches and other offices will be open as usual.

http://www.bloomberg.com/…

European governments stepped in to rescue Fortis, Bradford & Bingley Plc, and Hypo Real Estate Holding AG as tremors from the U.S. credit crisis reverberated around the world.

The U.K. Treasury seized Bradford & Bingley, Britain’s biggest lender to landlords, while governments in Belgium, the Netherlands and Luxembourg threw an 11.2 billion-euro ($16.3 billion) lifeline to Fortis. Germany guaranteed a loan to Hypo.

The interventions exposed how fallout from the crisis that drove Lehman Brothers Holdings Inc. into bankruptcy and prompted a $700 billion U.S. bank-rescue package has gone global. It also added urgency to negotiations among European policy makers as to how they deal with banking collapses.

“The precarious global environment means the weakest links in Europe are now falling,” said Mamoun Tazi, an analyst at MF Global Securities Ltd. in London. “If banks continue not to lend to each other we’ll see more failures.”

More insider deals, more centralization, more government interference and control.

This is what happens when you have a system based on debt on a large scale. It’s inherently insolvent.

Update:

This is cute…

Federal Reserve Chairman Ben Bernanke said in a statement the FDIC action “demonstrates our government’s unwavering commitment to financial and economic stability.”

http://freedominourtime.blogspot.com/…

http://www.freenewmexican.com/…

Anastasio Prieto, a truck driver from El Paso, Texas, doesn’t trust banks and prefers to carry his savings with him in cash. While this is a dangerous way to manage one’s money, a cursory glance at recent headlines tends to validate Prieto’s concerns about the stability of the fractional-reserve banking system.

During a stop at a weigh station in New Mexico on August 8, Prieto made a critical mistake: He cooperated with the police, assuming that as a law-abiding individual he had nothing to fear from them.

A New Mexico state trooper asked Prieto for permission to search his truck for contraband, such as needles or cash in excess of $10,000. Displaying an ingenuousness that breaks my heart, the truck driver consented, informing the officer that he was carrying nothing illegal — but admitting that he had $23,700 on board.

The police “forfeited” — that is, stole — Prieto’s savings. The DEA agents who presided over the theft “told Prieto he would receive a notice of federal proceedings to permanently forfeit the money within 30 days and that to get it back, he’d have to prove it was his and did not come from illegal drug sales,” reported the Houston Chronicle.

How terribly disgusting. How exactly does one prove $X in cash is theirs and not made through illegal means? Does anyone keep track of the serial numbers of their cash? I doubt his bank did when they cashed his checks. I’ll be surprised if this guy gets his life savings back. Unless the ACLU can shame the government into doing so. Never volunteer your property to be searched. It can only increase the chances of you losing something.