Analytical Wealth

At the moment tangible equity levels at the big banks are far below historical norms, and the Treasury is trying to figure out how to inject additional cash into the banks without effectively nationalizing them. Personally (especially in the case of Citigroup) I think the government is trying to split hairs in order to avoid officially nationalizing some of the big banks, because we'd like to pretend that our banking system is stronger than it is, and/or that nationalization is something that only those Europeans would do. 

However when you consider that many of the banks are functionally insolvent and would've failed without government support, how can you truly make the argument that certain banks haven't been nationalized? Can we really pretend like Citigroup hasn't been nationalized now that their tangible equity is down to 1.6%, and the government has injected tens of billions into the institution on top of 100s of billions worth of loss and debt guarantees?

At this juncture the treasury might as well just pull the trigger instead of fooling around and wasting time prolonging the inevitable, how can nationalization be avoided for certain banks when their problems are likely to worsen over the next 2-4 quarters? 

Disclosure: at the time of publishing the author didn't own a position in any of the companies mentioned in this article; the ideas expressed are solely the opinions of the author and shouldn't be viewed as financial or investment advice.