Three Cheers for Geithner, Citi at Three Dollars

The DOW had a tidy and sensational rally at the end of the session. There's some disagreement on what caused it. Some say short-covering; others say it was breaking news about Obama's pick for Treasury Secretary. Timothy Geithner's the name, he's the president of the Federal Reserve of New York.

Bloomberg News says he's eminently qualified: a bona fide internationalist who studied Japanese and Chinese and lived all over the world. Of course, he has the qualifications of a full-blown player: involvement with the IMF, the Council on Foreign Relations, and connections to Clintonites and former Treasury and Fed bigwigs.

CNBC says he was kingpin of the TARP, and what a worthless money-laundering Ponzi scheme that is. Nonetheless, I'll grant this Johns-Hopkins and Dartmouth-educated mind the benefit of the doubt, if only because I'm tired of my own cynicism. Three cheers for him. And 500 points.

But then there's Citibank, which plunged to below 4 dollars a share. This is the largest bank in the world. It might be sold on the weekend to Goldman, which is in freefall itself - Goldman's only advantage is that it's well-connected (read: Hanky) and unsaddled by mergers. Or Citibank's maligned CEO could resign as a confidence-building measure; CEO resignations are classic at this stage in a bank failure.

Whatever happens with Citi, it's serious. Again, this is the largest bank in the world. It's not an American problem, but a really terrific global problem. If the U.S. can't bail out Citi or marry it to another bank, this is going to be like an atom bomb exploding in the core of the financial system.

And there's still more than a month of Bush to go.