The latest plan began to coalesce on Sunday, when the Treasury secretary, Timothy F. Geithner, alerted Vikram S. Pandit, Citigroup’s chief executive, that the government would seek to convert its preferred stock. The move was designed to allay fears that Citigroup’s plunging stock price might prompt customers to pull money from the bank, although there is no sign that is happening now.
So Geithner actually thought that his plan to increase Citi's tangible equity, would actually help the common stock price advance??
The equity, or stock price of these banks continues to get hammered, because this is the vote of the marketplace on what Citi is really worth.
The banks use fictitious levels or tier's of capital, that include mispriced assets when regulators assess the bank's health.
And those valuations are as far away as what the market bid for the banks toxic assets are worth, and what the bank's ask is for these same toxic assets!
So Timmy's next plan then, will be to suspend mark-to-market accounting.
Just to make sure, everything then can be marked to make believe!