Of course the latest is that Citibank is talking to Wachovia.
Barclay’s is picking the carcass of Lehman Bros. Merrill sold to BofA, and on and on.
A number of years ago Citibank pursued this model by buying Smith Barney and Travelers forming Citigroup. The consensus seemed to be that it didn’t work out. They divested Travelers and there was a lot of talk that they were going to get rid of Smith Barney. Now that the current financial crisis has hit, these guys are merging as fast a bunch of bunnies in a pen.
Why should we think this is going to work out for anyone, either the stockholders, the depositors or the institutions? What’s the synergy of two financial institution in trouble merging? Does it just make them so big, like AIG, that the government can’t let them go down? Is it fiscally responsible or just a maneuver?