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A silent run on banks all over the US and abroad
The banks are failing fast. But more interestingly the people are withdrawing their money from Banks and keeping it home.
Wachovia finally went down. Citibank is forced by the Feds to take over the North Carolina bank as a caretaker of a failed bank.
The deal greatly expands Citigroup's retail franchise — giving it a total of more than 4,300 U.S. branches and $600 billion in deposits — and secures its place among the U.S. banking industry's Big Three, along with Bank of America Corp. and JPMorgan Chase & Co.
But it comes at a cost: Citigroup Inc. said it would slash its quarterly dividend in half to 16 cents. It also will dilute existing shareholders by selling $10 billion in common stock to shore up its capital position.
In addition to assuming $53 billion worth of debt, Citigroup will absorb up to $42 billion of losses from Wachovia's $312 billion loan portfolio, with the Federal Deposit Insurance Corp. agreeing to cover any remaining losses. Citigroup also will issue $12 billion in preferred stock and warrants to the FDIC.
People have stopped paying credit card bills, car loans and mortgages in panic. The credit system all over the world is imploding.
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