DOINK!

Jack Bauer is back, and boy is he pissed.

We can only hope a similar fate awaits Hank Paulson when he goes to leave office. Better yet, maybe when Jack escapes custody again, he will hunt down Hanky Panky Paulson and make him pay for destroying Jack's government pension.

On Friday, Gold soared. I made light of the Citibank situation in a couple of conversations I had Friday afternoon. Here's another bank blow-up staring the Fed and Treasury in the face, and Gold runs up. If you think Gold ran up on Friday for any other reason than this Citibank "threat", you were not really paying attention.

Now, how many times have we seen Gold race higher in anticipation of a banking catastrophe, only to puke up all it's gains on some cockamamie government bailout. Too damn many times, that's how many. Will this episode be another "1984 moment" for Gold. Citibank is one of the big fish people. Citibank goes bye-bye and there is NOT going to be a Christmas this year. If Gold should be doing anything right now, it should be racing towards the stars. We should know it's immediate fate, and that of Citibank come sunrise on Wall Street.

Sources: Gov't working on Citigroup rescue plan
Sunday November 23, 8:30 pm ET
WASHINGTON (AP) -- The government was weighing a plan on Sunday to rescue Citigroup Inc., whose stock has been hammered on worries about its financial health.

The Treasury Department and the Federal Reserve have been in discussions over the weekend to devise a strategy to stabilize the company, according to people familiar with the talks. They spoke on condition of anonymity because the discussions were ongoing.
http://biz.yahoo.com/ap/081123/citigroup.html

Plan to Rescue Citigroup Begins to Emerge
Federal regulators were nearing approval of a radical plan to stabilize Citigroup on Sunday in which the government would soak up tens of billions of dollars in losses at the struggling bank, according to people briefed on the discussions.

Citigroup executives presented a plan to federal officials on Friday evening after a weeklong plunge in the company’s share price threatened to engulf other big banks. In tense, around-the-clock negotiations that stretched through the weekend, it became clear that the crisis of confidence had to be defused now or the financial markets could plunge further.

Under the proposal, the government would shoulder losses at Citigroup if those losses exceeded certain levels, according to people briefed on the talks, who spoke on the condition that they not be identified because the plan was still under discussion.

If the government should have to take on the bigger losses, it would receive a stake in Citigroup that could potentially hurt existing shareholders.

It was unclear on Sunday night exactly how the Citigroup arrangement might work. The government and Citigroup executives were combing through Citigroup’s books and trying to determine the level of losses that it would be willing to bear. Another question is whether any additional government money for Citigroup, which has already received $25 billion under the initial rescue plan, would come from the $700 billion industry bailout that Congress approved in October or from other sources, like the Federal Reserve or the Federal Deposit Insurance Corporation.

Regulators were debating various terms of the arrangement on Sunday, including whether the government would receive preferred stock or warrants, instruments that give holders the right to buy stock. Preferred stock would be more beneficial to taxpayers because Citigroup would pay dividends on those shares; warrants would be more attractive to Citigroup’s existing shareholders because they would not immediately dilute the value of their investments as much as preferred stock.

Once the nation’s largest and mightiest financial company, Citigroup lost half its value in the stock market last week as the bank confronted a crisis of confidence. Although Citigroup executives maintain the bank is sound, investors worry that its finances are deteriorating. Citigroup has suffered staggering losses for a year now, and few analysts think the pain is over. Many investors worry that the bank needs additional capital.

With more than $2 trillion in assets and operations in more than 100 countries, Citigroup is so large and interconnected that its troubles could spill over into other institutions. Citigroup is widely viewed, both in Washington and on Wall Street, as too big to be allowed to fail.
http://www.nytimes.com/2008/11/24/business/24citibank.html?_r=1&em

And you thought this "crisis" couldn't get more pathetic. The wheels have clearly come off, and the train is about to jump the tracks. I can see the sheep lining up to buy more US Treasury debt now...for safety. You'd be safer holding a 2-iron to the heavens in a lightning storm. Ugh, this is gonna get ugly...