Fed Pushes Citi, BofA to Increase Capital - first they need to fire the management

The Obama administration makes the smart thing and leaks information in bits and pieces before the scheduled time hence the market does not overreact. Nevertheless the big picture is disturbing to me as they create a phony atmosphere as if the worst was over and that is dangerous as regular people may make wrong decisions based on that as the consumer sentiment indicates as of today. The economist had a great cover on that calling it at glimmer of hope (actually its owned by Rothschild's literally).

http://www.economist.com/printedition/displayStory.cfm?Story_ID=13527685

Several actions which need to be investigated happening during the Merrill takeover which was disastrous for BAC (and taxpayers) and was initiated by Paulson and Bernanke. All should be hold responsible but first off all Lewis and Bernanke need to be released from their duties as they did not live up to their duties and obligations.
What is the point in pushing a week company to buy an even weaker one when hundreds of billions of taxpayers money will need to be pumped in - that was an insane call and only made money for some insiders who new about this deal as the second part of the insanity was the premium BAC was forced to pay. I would like to see if Goldman was running any trades on this or any other out of the range option activity.
City bank on the other hand had the insane idea to take over Wachovia and was even considered for that as they can not even run their own shop properly - weird stuff to begin with. They have pumped over 50 bil into Citi including AIG and guaranteed for 100 bil of toxic assets. Citi is selling all outside assets it seems it can get rid of and have collected around 20 bil for the German unit, Smith Barney and Nikko as of today covering some of the losses. Citi's money machine was the credit card business which runs into big problems going forward especially when Obama goes ahead in regulating the criminal interest they do charge whenever they can. Cit has still a few hundred billion toxic portfolio at hand which part of has been taken care off by US taxpayers and they were able to mark them up to new accounting rules or as Pandit calls it they moved them into til maturity evaluation. That does not increase the underlying quality of those assets and a deteriorating economy will do more harm going forward not only to them but to the whole business which again will create situation like we had with AIG.

Excerpt from WSJ

The capital shortfall amounts to billions of dollars at Bank of America, based in Charlotte, N.C., people familiar with the bank said.
..
Industry analysts and investors predict that some regional banks, especially those with big portfolios of commercial real-estate loans, likely fared poorly on the stress tests. Analysts consider Regions Financial Corp., Fifth Third Bancorp and Wells Fargo & Co. to be among the leading contenders for more capital. Wells Fargo declined to comment.

While the Fed initially planned to release the results of the stress tests on May 4, the government says the results will be released sometime that week.

Banks that are deemed to need more capital will have six months to find it, either from private investors, other financial institutions or the U.S. government.

Bank of America and Citigroup have required a total of $95 billion in taxpayer infusions, and the government has agreed to protect the banks against most losses on hundreds of billions of dollars worth of assets.