03 October 2008

And now, back to the crisis

I'll have more to say about the debate in a little while, but for now, a round up of this morning's economic disaster news.
  • Wells Fargo agreed to buy Wachovia lock, stock and barrel for the equivalent of $15bn. This as opposed to an earlier deal in which Citi would have bought just Wachovia's banking operations while the Feds would figure out what to do with the rest. The Feds won't be involved in this deal at all--it's entirely a private sector stock-swap transaction. On the surface of it, it doesn't make a lot of sense: why would a bank with almost no exposure to the crisis absorb one that's failing because of it? Answer: Wachovia is all over the east and southeast, where Wells Fargo isn't. Now, Wells Fargo becomes a national franchise, coast to coast (they conqured the middle of the country when they bought Minneaoplis-based Norwest a few years back).
  • The jobs report that came out today was crap on a cracker. If it was the only relevant news, stocks would probably be tanking, but it's not. The Wells Fargo deal cheered the markets much more than the jobs report depressed them, and then, of course...
  • The House is debating, as we speak, the revised bailout bill. Unless something really bizarre happens (and I don't rule out bizarre right now), there will be a vote sometime mid-day. 

    I honestly am not certain which way that vote will go. Pelosi, Boehner and Blunt would not have let the measure come to the floor if they didn't think they knew it would pass, but they thought it would pass on Monday, as well, and were left flat-footed when it failed. At any rate, I expect a narrow margin, either way.
There was some talk this morning of various members trying to attach yet more provisions to the bill, but Pelosi et alia will likely resist any changes. Changing so much as a semicolon will require it to go back to the Senate, or to a conference committee, and nobody wants to take the time.

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