This is a very interesting take (and h/t to Jordan for the head's up):
http://zerohedge.blogspot.com/2009/03/creeping-equitization-of-citis-capital.html
If Durden is right, what is really going on here is not (pace almost everyone) the gradual nationalization of Citi, but rather the gradual forced debt equity swap of Citi, using the spectre of nationalization and wipe-out -- "Geithner's blow-torch" as he calls it -- to apply the necessary coercive push.
This may not be a bad strategy for recapitalizing the banks at all. It's got its own difficult shoals to navigate, as Durden points out. But compared to the alternatives, it might be the course with the least obstacles. And ironically, it's the one course nobody is discussing in the public sphere. (Except Martin Wolf, but he's only ever raised it theoretically, as something he considered a first-best idea if this was a Sim-City universe and he was in charge. AFAIK he hasn't ever treated treated it yet as something he expected would ever be embraced by the powers in charge. AFAIK, he hasn't yet considered whether the latest evolution of the Citi saga might be his original vision coming true. But to be fair, it only just happened.)
Michael