Will subprime crisis take down Citigroup?

Who could have even imagined Citi being bought out a year ago? They were one of the high flying winners on Wall Street and rated as the largest company in the world only last year. Thanks to their drunken-sailor gambling on shoddy subprime loans, the CEO Charles Prince walked away with a princely fortune but the company itself is now a prime target by European banks. Part of what makes this possible (besides the enormous subprime losses) is the feeble US dollar. Yes, it's the same dollar that is contributing to the record high oil prices. In short, the weak dollar policies of the Bush administration are coming home to roost. (Third term, anyone?)

So should this takeover happen, what does it mean to US consumers? For starters it means one less bank out there so this would be continuing the trend since Reagan of consolidation in the US banking industry. Some may be impressed by the idea of Sovietesque mega banks but besides the high rollers - who got us into this headache in the first place - I don't see how a 200,000 person bank is really good. For mega deals, sure, but for the rest of us, I just don't see it.

Also, we need to step back and look at the Bear Stearns collapse and bailout. Is it in the best interest of consumers, taxpayers or the government to create another situation where failure is not an option? Bear Stearns was a small company with only 14,000 people employed. What are the consequences of a mega bank failure? Even today we have yet to see any serious talk in Congress - Democrats or Republicans - about that bailout. It's as if it was a non-issue yet in reality, that was big. We have not seen any signs of change on Wall Street in terms of healthy pay despite record failure so there is no reason why we should allow ourselves to be set up for the next bailout.