Wachovia Simply Ran Out of Time

The rescue package didn't occur fast enough. It didn't occur fast enough for Washington Mutual (WM) to get rid of the bad loans, and it didn't get to help Wachovia (WB) in time.

Wachovia was a decent bank that made a really bad acquisition, and if the bill had passed soon enough, it could have split itself into a good and bad bank. It didn't get done in time.

And now Wachovia is dead.

Citigroup (C) will now be a stronger bank for it, because it can take advantage of the bill and dump all of those Golden West assets. It is also good that Citigroup is buying the WB bonds. That the bonds are OK means total chaos will be avoided.

This is a terrible story. Bob Steel was trying to work out a good deal for shareholders. I believed in him. But once the marks on the Washington Mutual loans were taken by JPMorgan (JPM) and they were much lower than Washington Mutual carried them for, Steel could not pull it off.

It is a great shame. His plan would have worked.

He just didn't have time.

At the time of publication, Cramer was long JPMorgan.

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