Quintessential

Yves Smith at Naked Capitalism checks in with a very important blog post.

Holiday Reading

Michael Lewis, who wrote a tell-all book on '80s Wall Street, chronicles our current financial crisis. This is the best article on the financial crisis that I've had the pleasure of reading. You will laugh out loud. Unless you've recently been laid off, then you'll just be angry.

Do You Speek "Alpha"?

Don't know a ABS from a CDO? A CDS from a MBS? You're not alone. The people that invented the things didn't know their ass from their elbow either. The Chinese food that fueled the brainstorm session must have been laced with some bad MSG.

Here's a handy guide explaining such rarefied financial concepts from the NPR's Marketplace.

And Citi could be yours...

Apparently, there are rumors making the rounds that Citigroup is on the verge of bankruptcy. Management is considering drastic action. Yves Smith of Naked Capitalism writes.

Financial institutions are too capital starved to be sticking their necks out now, and private equity firms cannot meet their target returns without leverage, which they cannot get right now. And who pray tell would buy the entire bank? Citi is so large that any acquirer runs the risk of at least a partial reverse takeover. And do not say JP Morgan. That bank is already too large to fail, and merging with Citi would greatly increase systemic risk in the long term.

Taxpayers. My prediction is that this situation will be resolved in the coming days with the taxpayer owning the all or most of Citi - probably stuck with the least desirable portions of this turkey. Treasury will improvise a takeover under the vast authority of EESA. Paulson was keeping some powder dry for just this sort of occasion. I think I might end up working over Thanksgiving.