The marriage of Citi and Wachovia

Not even the ploy of the Mcain/Obama campaigns can overshadow the mortgage crisis. Citicorp and Wachovia bank have been the key players for the last few days. It’s a “hell has no fury over a” bank deceived.

Citicorp, jilted by Wachovia, took its case to court. Citi is trying is to keep Wachovia from continuing a deal that it entered with Wells Fargo while under a signed “exclusivity” agreement with Citi. Worst of all, City is asking for punitive damages for in the billions that will likely bleed Wachovia to death and before Wachovia has a chance to go bankrupt. http://online.wsj.com/public/resources/documents/citicomplaint20081006.pdf
In a country, where fast food and consumerism reign supreme, the combination of Laws and Regulations is a perfect recipe to ensure fairness and justice even in the competitive world of business.

It is no news that Wachovia would have failed had it not been for its last minute deal with Citi. Clearly, Wachovia used Citi. Wachovia’s move kept the bank afloat while it shopped for and got a better deal from Wells Fargo. it was a smart but deceptive move. In reality, Wachovia got itself a bridge loan from Citi that not even Wells Fargo was willing to extend at the time that Wachovia needed it to avoid certain death. That was not fair. And yes, for those of you who say that fairness has no place in business and in law, think again. Fairness is why there are laws and regulations. Ethics and trust must again matter.

If Wachovia is allowed to get away with this tactic, then people will lose faith.
Wachovia signed an agreement and accepted money as part of that agreement, Wachovia approved Citi’s public announcement of their deal, then Wachovia is bound.
As the mortgage mess plays yoyo with the market, it appears that many people have not learned anything. Where do we draw the line between taking risks and Gambling?