> Is it that mysterious?
No, not mysterious. Just tricky. And quite unlike anything that's ever been attempted. I think Michael makes this clear. Alas: you're ready to play Let's Take Down An Investment Bank!
Don't forget that the FDIC doesn't think it's possible[*] ... so, ready?
> 1. Take control
Ok, once you've done that (whatever it means to "take control" of a multi-national company with significant 24x7 operations in at least 100 of the 180 or so countries in the world), the strong investment banks throughout the world will, probably in the course of one "market day" (which turns out to be equivalent to a solar day: 24 hours), pick clean all the open positions that "your" bank had prior to it becoming "your" bank.
Next?
> 2. Separate out bad assets
Now they are all bad. "Your" bank is dead. See the end of Lehman for details[**]. When Lehman filed, they had something like $639B of assets and $600B of liabilities (note: not technically insolvent!); at last count, they continue to have ~$200B of unfunded liabilities -- yes: that number has significantly increased since the filing because, well, their assets, such as they were, got picked clean.
When they filed, they were "losing money" -- but they wholly reinvented the term "losing money" *after* they filed.
It looked, roughly, like this:
http://www.drumnet.us/MalaMala3.htm
In addition, all of your deposits that are over the $250k FDIC insurance limit -- a significant portion of your balance sheet, because Citi has many large depositors -- are now gone, due to a run. BTW, 2/3 of Citibank's deposits ($500B of $750B?) are outside of the US ...
Note that Citibank is about 3x bigger than Lehman was when it went down, and Bank of America is perhaps 50% bigger than that. Combined, they have somewhere in the neighborhood of $5T of assets, which is about 35% of US GDP. Are you going to take them both down in the same weekend? If you pick just one, choose carefully ... (don't snip the blue wire!)
You have approached the porch and found a flaming bag of dog shit. Stomping on it has made the shit fly everywhere and your pants leg is now on fire.
> Why is that a giant leap into the unknown?
You first?
On the other hand, as Doug says, maybe it's just "because we're Americans" :-)
/jordan
[*] http://www.fdic.gov/news/news/speeches/chairman/spmar0209.html
[**] Even Lehman's "savior" stole $3B from them on the way out http://zerohedge.blogspot.com/2009/03/barclays-fleeced-lehman-creditors-by-5.html