Because when you look at the Treasury's terms of their Capital Assistance Program, (Treasury link)it's clear that they are propping up Citi, the weakest of the Zombie banks, because it's purchasing preferred stock, and "These shares can convert at the firm's discretion (with the approval of their regulator) into common equity if needed to preserve lending in worse-than-expected economic environment at a conversion price set at a 10% discount from the prevailing level of the institution's stock price as of February 9, 2009."

Why February 9, 2009? Because that's the day before Citi's common share price fell off a cliff.

If they go back any further, it makes it transparently clear that Citi is insolvent, and Timothy "Eddie Haskell" Geithner is trying to avoid placing it into receivership...So....More zombie banks.

If you want any confirmation that they won't nationalize pre-privatize the big banks ever, you need only look at Bernanke lobbying for a weakening of the mark to market rules, so that they can call the valueless sh^% on their books a pony.

It appears that everyone is doing their level best to duplicate the mistakes of the Japanese in the early 1990s.

Citi is trading at less than $3/share.  BoA ain't doing much better.  Their shareholders are already wiped out.  This is about letting senior management keep their jobs, even after they mismanaged our finance system out of existence.

Cross posted from 40 Years in the Desert.