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The last days and the last hours for Wachovia, as Robert Steel- formerly at the Treasury, who became CEO at Wachovia in July 2008- tried to save Wachovia as its share price plummeted. The immediate cause of the crisis was an imminent downgrade of ratings of Wachovia by the credit ratings agencies just as as the bank had billions of dollars in debt coming due this week, and the collapse of WaMu that created crisis conditions for Wachovia with its large holdings of so called toxic assets. Steel tried to negotiate a deal with Wells Fargo's Kovacevich, who initially offered a price in the tens of billions (about $20 billion), and said he could do it on his own without FDIC help. Then on the last day he backed off saying he had concerns for some of Wachovia loan portfolios. At this point Fed, FDIC and Treasury officials were huddled together in meetings to figure out what should be done. Steel was in conversations with Citigroup's Pandit at this point, and FDIC offered to guarantee losses on bad loan portfolios of Wachovia above $42 billion, in exchange Citi would give the FDIC warrants on Citi stock and preferred shares worth $12 billion as an insurance payment. The price at which Citigroup acquired Wachovia at this point was nearly $2 billion. One thing remained. What about the bondholders. WaMu's bondholders were wiped out, so this time Treasury did not want to rattle the credit markets further. It needed someone to shoulder Wachovia's $54 billion debt, which Citigroup at this point agreed to do. Citi gets a large number of Wachovia branches and depositors with this deal, combining the $393 billion of deposits of Wachovia with its $208 billion in deposits, making it the 3rd largest bank in the USA in terms of deposits after Bank of America and Chase. See graphs....

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Stock markets rise with S&P 500 up 3 percentage points after pause in tariffs is announced by China and the US on May 12, 2025. After some ups and downs the stock market has regained all losses since Jan. 1 2025 with tariff and economic policies of new DJT administration in the US. Tariffs will be 10% by China and 30% by the US during a 90 day pause in tariffs by the 2 countries.

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German Foreign Ministry is to take up question of dependence on China in 2026, and a commission will look into it. Yet this comes 2, 3 or 4 years too late. Germany is scrambling to develop it's foreign policy. German Defense officials in the military say they no longer have 24 contact with their US counterparts. Germany is pulling Britain and France with it to counter any signs of weakness in Europe, so that the three countries can act as a counter weight to the US, and to Russia allied with China. Merz is now called the foreign policy chancellor. So much has changed from the Merkel days which are years that were wasted in infrastructure, digital, foreign policy, and migration policies that make sense for people's ease of living. Germans may have underestimated Merz in the way they overestimated Merkel, lacking the clear view of what the future requires from Germany in a world filled with China, India, Brazil and the other nations of Europe, and the US, a world which requires confidence and investment. ...

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BMW's CEO Reithofer says in a conference call that the company will redirect cars from the USA to China and Russia and other countries because of the currency exchange rates and unfavorable market conditions in the US. These market conditions caused a236 million euros charge to compensate for the falling value of second hand vehicles and potential payment defaults on loans for leased vehicles in the USA. At Daimler you see a 491 million euro fall in the value of Daimler's remaining 19.9% stake in Chrysler LLC showing up in 1st quarter results but also similiar to BMW one sees a 151 million euro writedown to cover the falling value of cars that were leased to customers. This is from earnings announcements by Daimler and BMW.

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The personal savings rate which fell below zero during the housing bubble went up to 6.9% in May, according to Commerce Department numbers. This is the highest it has been since December 1993. Consumer spending posted asmall increase, personal consumption up 0.3% in May after falling the previous 2 months. The rise in personal incomes in May was 1.4%, according to the Commerce Department. Consumer attitudes also rose for the fifth month in June, up to 70.8 in June from 68.7 in May acording to the Reuters-University of Michigan consumer survey. But the survey also shows amajority saying their financial situation had worsened with job losses, fewer hours of work, or income declines.

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Analysts at Citigroup predict that Bank of America might record a$3.6 billion loss for fourth quarter 2008. It appears that Bank of America may have overreached in acquiring 2 troubled firms Countrywide and Merrill. WIth $25 billion in TARP funds already given to Bank of America, Bank of America has informed Treasury that without additional funding it may not be able to complete the acquisition of Merrill. Treasury and Bank of America are negotiating these additional funds. Meanwhile Goldman Sachs analysts estimate worsening losses from the credit and financial crisis. Losses says Goldman economists could reach $1.1 trillion from residential mortgages alone up from $780 billion earlier estimate. Adding in losses from commercial real estate, credit cards, auto and business debt could send this figure up to $ 2.1 trillion. And bad overseas loans of US institutions would be additional to this. Not surprisingly Fed Chairman Bernanker would like to see much of the second half tranche of $350 billion in TARP funds ging to stabilize the financial system....

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With vaccine hesitancy in the US the goal of vaccinating a large part of the US population is still elusive. Less than half of the US population is fully vaccinated as of July 30. The vaccination rates in the US are now much slower than India even taking into account the population difference. The vaccination in India is at the rate of 4 to 5 million a day for the past week in India. In the US this report in The Guardian shows 4.7 million vaccinated in the past 2 weeks. On July 30 856,000 people were vaccinated in the US compared to over 5 million in India.  Newspaper reporting that encourages vaccine hesitancy people to delay getting vaccinated because of poorly reported headlines is adding to vaccine hesitancy in the US. This has led to much frustration at the White House. The threat of the Delta variant is making more people to take vaccination. Southern states are seeing a jump in vaccinations. Many prominent Republicans are now endorsing vaccination.  One of the problems in tackling the Delta variant is the confusing nature of the CDC guidance on masks. On May 13 CDC issued guidance saying masks were not necessary indoors and outdoors. Now 3 months later in July the CDC says the threat of Delta variant means mask wearing is essential particularly indoors because of the higher transmissibility of the delta variant.  ...