Market consolidation continues.

Citigroup (C) will buy the Wachovia banking assets for $2.2 billion in an all-stock deal. Wachovia was the fourth largest bank in the United States which had about $53 billion debt and a loan portfolio worth more than $300 billion. Due to the purchase Citi will have roughly $42 billion of losses due to bad debt.

Here is the real kicker – let’s say you were a Wachovia share holder. On Friday ever share you owned would have been worth $10 but, as you woke up Monday morning, your shares would have been worth .86 per share.

Ouch.

UPDATE: Why did Wachovia need to sell so quickly?

Be cause it ran out of time. That is to say the bailout did not happen quick enough, it could not get rid of it’s bad loans, and needed to sell before it collapsed.

UPDATE: Shares of National City Pluge 52%

The stock market is wondering who is next to go and, by the looks of it, they are thinking it may be National City.

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