Less than a week ago, Wachovia Corp. was supposedly in such bad shape that it agreed to sell its banking division to Citigroup for $2.16 billion, with the federal government agreeing to financial support if Wachovia's portfolio of bad loans proved more toxic than estimated. Now Wells Fargo is buying all of Wachovia for $15.1 billion -- and with no federal safety net.
Could this new deal mean that the overall banking crisis is not as bad as it's portrayed?
The purchase price is above the $10 billion Wells Fargo offered last weekend before it backed out, reportedly because it was concerned about the particular health of one of Wachovia's mortgage portfolios. So what gives?
Today's news stories about Wells Fargo's change of mind offer no clues. Even the Wall Street Journal, which has been delivering sterling coverage of the financial crisis, was pro forma in its coverage.
Let's see how this interesting story unfolds.
LATER DEVELOPMENT: This WSJ piece provides some new information.