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ProShares UltraShort Financials Message Board

  • jessicasjwh jessicasjwh Oct 3, 2008 6:45 PM Flag

    Question on Citi

    Would C be able to sue FDIC or WB?

    I'm trying to figure out how the WFC/WB deal would unfold.

    Folks in C board seem to believe C will get this deal at the end of the day. They say FDIC can legally force WB to be sold to Citi even though it's a big burden to tax-payer and shareholders, because it was a done deal.

    Your insights & opinions would be greatly appreciated.

    Disclosure: I'm short C and trying to figure out when to cover.

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • if the fdic does not back up citi, what happens next time when they need to find a buyer for ncc as an example.

      their phone calls will simply go unanswered

      ncc by the way, in need of a buyer/take over

      tons of smaller banks out there also, and the fdic will lose all credibility when they urgently need help in the future. for that reason, i think wfc won't get the deal. matter of fact, they might just get the fdic pissed off enough they want a closer look at their books and account rule changes

    • I'm also short C via naked Oct calls. Yesterday I was losing today I'm making money. I am also wondering if I should wait till expiration. Either way if you can hold your position I think C gets cheaper with or without WB deal. M Whitney still had a sell on the stock after the WB deal was announced.

    • C will keep WB, after all they stole it, with government assistance, fair and square. What the hey, are you some sort of subversive free market capitalist or go on the homeland security watch!!!

    • In the USofA, anybody can sue anybody for any reason, or for no reason at all. But, you cannot sue the government without their permission.

      In these sorts of deals, it is utterly impossible to believe anyone, to know anything about the facts, or to have any idea as to who is right or wrong until about $30 Million is spent on lawyer fees, and even then you may not know. I would not make any investment decision based on anything having to do with C and its rights, or lack thereof, against WFC. These things can take years to sort out.

    • BTW, how are you short C with the ban in place? IMO, without the ban, CITI would be in BIG trouble. If I had a short position I'd keep it. Hedge it with options if you must.

      When I heard about the Citi - Wachovia merger, it seemed like an awful idea since both have real problems with derivative portfolios. Wells Fargo MAY be able to maintain capital ratio with Wachovia, but CITI couldn't. Either way, CITI will be lower in 3 months. With Wachovia, it may be taken out by FDIC.

    • Check out the Wall Street Journal law blog, esp the comments today. Lots of M&A lawyer input.

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