UPDATE – MARCH 4:  The deal with Citigroup may be off and the FDIC may be out of the deal.  That’s better for taxpayers and probably better for Wachovia stock holders.  Wachovia stock is up. Jim Cramer on his CNBC show, Mad Money, accused the FDIC of over-reaching in the Citigroup-Wachovia deal.

Wells Fargo is offering to acquire Wachovia for $15 billion. More here.

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Original article, Sept 29:
In a deal brokered by federal regulators, Citigroup is purchasing Wachovia’s banking operations for $2.1 billion. According to the Associated Press, “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.”

The FDIC asserts that this was not a bank failure. More here.