And in case voters needed a reminder that even some of the nation's largest banks aren't immune, most papers front the government-orchestrated sale of most of Wachovia to Citigroup for $1 a share, or about $2 billion. Citigroup will inherit Wachovia's $312 billion loan portfolio, but the government agreed to pay for any losses after the $42 billion mark. In return for this guarantee, the government got $12 billion in preferred stocks and warrants.
Wachovia's sale is the latest example of how Wall Street has been reshaped in the past few weeks with what the NYT calls "a wave of shotgun mergers." In a separate Page One piece, the WSJ says that the "notoriously fragmented American banking system is going through a decade's worth of consolidation in a matter of weeks." Now only the strongest banks are likely to survive, and the consequences of this consolidation will be felt for years. Customers might see their fees go up because of a lack of competition, but on the upside, the mere size of these banks means they'll be less vulnerable to future economic shocks. Then again, these banks could decide to take bigger risks because they may be seen as too big to fail.
Faced with a huge economic crisis, the country's political leaders "have failed utterly and catastrophically to project any sense of authority, to give the world any reason to believe that this country is being governed," writes the NYT's David Brooks. Just as they did with their anti-immigration crusade, House Republicans "have once again confused talk radio with reality" and chose to listen to "the loudest and angriest voices in their party, oblivious to the complicated anxieties that lurk in most American minds." If the economy tanks, "they will go down in history as the Smoot-Hawleys of the 21st century."
"The basic problem here is that too many people don't understand the seriousness of the situation," writes the Post's Steven Pearlstein. "But it is a measure of how little trust remains in both Washington and Wall Street that voters are willing to risk a serious hit to their wealth and income rather than follow their lead."