One begger adds another beggar

ONE BEGGAR ADDS MORE MEMBERS TO INCREASE REVENUE

Beggins ia also a lucrative business. The beggars go on adding staff or members, train them the art of begging, and then strategically post them for all round increase in revenue.

The authorities are scared to death. Everyday, there is a scare and run on the bank. Today, the people are so scared and sceptical of the banks, that they have started buying short term treasury to the extent that it no longer yields anything - the short term yield is ZERO.

Better to invest in treasury rather than trust any bank nowadays. At least, the treasury will print notes, as it did agree to print $700 billions, whereas the banks can only give CDO and CDS.

Wachovia, one of the largest bank, was ultimately sold to Citigroup who is reeling under $50 billions of losses, and it agrees to take over $32 billions of extra losses from Wachovia.

Sheila Blair, FDIC Chairwoman, brokered the deal. She has to run the FDIC like a "Marriage Bureau" where she has to keep profile of good, bad and ugly brides and groom.

The parade is never ending. Washington Mutual, now Wachovia. I found one interesting observation. All the names start with B,V (W) and U who are in serious troubles.
B = Bear Stearns, Bradford and Baily (UK); bank of East Asia (HK);
W = Washington Mutual, Wachovia
U = UBS

Looks like the planet Shani, which governs these rashis, is running 7 1/2 years of panoti. Beware.

The news item is quoted below (Source: Washington Post 29/8/2008)



By Binyamin Appelbaum, Neil Irwin and Howard Schneider
Washington Post Staff Writers
Monday, September 29, 2008; 8:41 AM

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 Wachovia purchase is the second major bank buyout orchestrated by the FDIC recently. The agency also helped arrange the sale of the failed Washington Mutual to J.P. Morgan.

FDIC chairman Sheila Bair said in a statement that the action was "necessary to maintain confidence in the banking industry given current market conditions."

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

UNQUOTE

Kalidas, Hong Kong
29/5/2008

"Today's action will ensure seamless continuity of service from their bank and full protection for all of their deposits," the FDIC statement said.