Is Citigroup The New 'Bank of United States'?

The market is beginning to realize Citigroup is not merely in the midst of a liquidity crisis - they are insolvent. What's the difference? They don't just need cash to get them through a rough spot - the value of all of their assets (loans for banks) minus their liabilities (deposits) is negative.

They are broke, bankrupt, kipput. Do I know this for sure - no. It is, however, very likely.

In other words - Citigroup is on the verge of collapse. They are definately too big to fail, but if they do, I believe the government may have to nationalize the banking system. This is not a good thing.

I know you are all saying this is impossible. It is not. No matter how big an institution, if they owe people more money than they are able to generate from loan interest and asset sales, they will go under. The government will solve this problem by "injecting capital". This is Fedspeak for taking your hard earned tax dollars, even more of them, and throwing them into a deep black hole.

Remember the NewYork Bank of United States? Not many people have heard of it. This will explain:

http://en.wikipedia.org/wiki/New_York_Bank_of_the_United_States

This time the government will save depositors. (FDIC insurance) This makes a Citi insolvency less tragic than the Bank of United States case.

The following excerpt is from a writing by the late Benjamin Anderson*:

"When the first mortgages grew shaky, when the second and third mortgages had no market, and when the bank's stock was crashing, the Bank of United States and its affiliate, the Bankus Corporation, were in grave peril. Depositors grew very uneasy and they made heavy withdrawals of funds.
Unsuccessful efforts to save the Bank of United States. The great New York clearinghouse banks, the Federal Reserve bank, and the state superintendent of banking, Joseph A. Broderick (who had no part in giving the name to the bank and whose job was primarily salvage), made strenuous efforts to save the situation. The great clearinghouse banks were prepared, in the interest of preserving the good name of banking in New York, to stand part of the losses. On Monday, November 24, 1930, it was announced that there would be a merger of the Bank of United States with the Manufacturers Trust Company, the Public National Bank & Trust Company, and the Interstate Trust Company, with J. Herbert Case, Federal Reserve agent and chairman of the Board of Directors of the Federal Reserve Bank of New York, as the head of the merger.
This looked like an admirable solution of the problem. The financial community breathed a great sigh of relief when it appeared that J. Herbert Case thought that the situation could be solved in this way. It appeared that the aggregate capital funds of all these banks would suffice to absorb the losses and still leave a strong institution. But the agreement was a contingent agreement, and the other banks were to have time to scrutinize the assets of the Bank of United States. As they did, the merger became impossible. The officials of the other banks and J. Herbert Case could not assume responsibility for such a mess. The problem remained. The clearinghouse continued to work hard upon it.
A conference, lasting beyond midnight, of leading New York bankers sat with superintendent Broderick on the night of December 10 and the early morning of December 11. A plan was worked out by which a wholly new management, under the presidency of the head of one of the small but sound banks of the city, was to take over the Bank of United States with a guaranty of the great clearinghouse banks against loss.
But after this able young president and his associates, accustomed to clean, sound banking, looked at the assets of the Bank of United States, looked at the second and third mortgages, looked at the tangled and involved transactions they would have to deal with, they declined. They just did not know how to do that kind of banking. No other New York bank knew how to do that kind of banking.
And so it came to pass that, on Thursday morning, December 11, 1930, the Bank of United States was closed for good. "

http://www.marketoracle.co.uk/Article3513.html

* Benjamin McAlester Anderson, 1886-1949, author of the posthumously published treatise Economics and the Public Welfare, A Financial and Economic History of the United States, 1914-46 (Princeton: D.Van Nostrand Co., Inc., 1949; second edition: Indianapolis: Liberty Press, 1979) from which this excerpt was taken, slightly edited by Antal E. Fekete of Gold Standard University.

Does this sound familiar?
How many Bank of United States are there out there today?