Citi May Be Next

Nouriel Roubini, NYU Stern School economist and chairman of RGE Monitor, is predicting another failure of a major bank.

"Eventually, a government takeover of the biggest bank in the U.S. is a possibility," he says.

Will Bank of America, Chase, and Wells Fargo make it? Will a single major institution be left standing after this debacle finishes playing itself out?

Will we even still have MONEY after the dusts settles?

Nobody is really surprised that the big bailout is not working. Our policy makers should have know it wasn't going to work, and that we're not going to rebuild the economy by artificially propping up the prices of outrageously overinflated assets (i.e .housing) by shoveling evermore public money into the widening hole, while burdening the treasury with ever more debt.

The only emergency action that the government could have taken that would actually help would have been to guarantee all "demand money"- bank deposits and money markets, to the full amount deposited. This would forestall bank runs and assure that something would be left after all the failures and defaults.