Citigroup

• Grillo kills move to break Italy deadlock (FT)
• Abe nominates Kuroda to run BoJ (FT)
• More WMT bad news: Wal-Mart Chief Administrative Officer Mars to Leave: WSJ (BBG)
• Japan's Abe: Islands Are Indisputably Ours (WSJ) - Except for China of course
• Low-key departure as pope steps down, to enter the final phase of his life "hidden from the world" (Reuters)
• Cuts unlikely to deliver promised budget savings (Reuters)
• European Union caps bankers’ bonuses (FT)
• White House, Republicans dig in ahead of budget talks (Reuters)
• Jockeying Stalls Deal on Cuts (WSJ)
• Argentina Says It Won’t Voluntarily Comply With Bond Ruling (BBG)
• Italian president says forming new government cannot be rushed (Reuters) - or happen at all
• Central Banks Spewing Cash Must Plan Exit Timing, Rohde Says (BBG)
• China Regional Targets Cut in Sign Debt Concerns Heeded (BBG)
• RBA Says Up to 34 Central Banks Holding Australian Dollars (BBG)

The 2011 changes by the FDIC to the safe harbor for "true sales" may have been the end of "Too Big To Fail."

As I and many others have pointed out for years, unless you are a crony Wall Street welfare queen you can pretty much forget about any high level position in the Obama Administration.  Barack made that clear from day one when he decided to surround himself with two of the people at the core of the 2008 financial crisis, Larry Summers and Tim Geithner.  The trend is simply continuing with the current nominee for Treasury Secretary: Jack “Bailout Bonus” Lew.  The revolving door is institutionalized and at this point as reliable as a Swiss watch.

• Risk of instability hangs over Italy poll (FT), Protest votes add to uncertainty in close Italy election (Reuters), and... Risk On
• Czech inspectors find horsemeat in IKEA meatballs (Reuters)
• China’s Slower Manufacturing Casts Shadow Over Recovery (Bloomberg)
• So much for reform: China Prepares for Government Shuffle as Zhou Stays at PBOC (Bloomberg)
• France to pause austerity, cut spending next year instead: Hollande (Reuters)
• Sinopec to buy stake in Chesapeake assets for $1.02 billion (Reuters)
• White House warns states of looming pain from March 1 budget cuts (Reuters)
• China Quietly Invests Reserves in U.K. Properties (WSJ)
• Osborne Keeps Austerity as Investors See Downgrade as Late (BBG)
• South Korea's new president demands North drop nuclear ambitions (Reuters)
• Russia accuses U.S. of double standards over Syria (Reuters)

U.S. Department of Justice, Airgas, Alternative Investment Group, American Century, America’s Health Insurance Plans, ApexBrasil, Association for Corporate Growth, Bank of America, Bank of New York Mellon, Barclays Services Corporation, BNP Paribas, Capital Research, Citigroup, Deutsche Bank, Fidelity, Franklin Resources, Freddie Mac, Goldman Sachs, Intel, JP Morgan Chase, Microsoft, National Rural Utilities Cooperative Finance Corporation, NMS Group, Oracle, Pension Real Estate Association, Real Estate Roundtable, Reynolds American, Royal Bank of Scotland, Visa, Wells Fargo, Nomura Holdings America, Laurus Funds, Ripplewood Holdings

• Spain’s Deficit Widened to 10.2% on Bank-Rescue Cost (BBG) - or as Rajoy would say, when one excludes all negatives, it was a surplus
• Monti Austerity Pushes Italians Toward Parliament Upheaval (BBG)
• Russia accuses U.S. of double standards over Syria (Reuters)
• Euro Area to Shrink in 2013 as Unemployment Rises (BBG)
• UK, China central banks to discuss currency swap line (Reuters)
• Italy Court Rejects Challenge to Bailout of Monte Paschi (BBG)
• Japan's Abe to showcase alliance, get Obama to back Abenomics (Reuters)
• Russia’s missing billions revealed (FT)
• China Home-Price Gains May Presage Policy Tightening (BBG)
• Fed unlikely to curtail stimulus despite rising doubts (Reuters)
• Banks face fines up to 30 per cent of revenues (FT) - just as soon as Basel III is passed (i.e., never)
• J.C. Penney Can Raise Billions Under Revised Credit Line (BBG)
• Cost of Dropping Citizenship Keeps U.S. Earners From Exit (BBG)

How many trillions of Dollars are we going to let the Fed spend? The Fed balance sheet is now over $3 trillion… making it larger than the GDP of France, the UK, or Brazil. Indeed, if the Fed’s balance sheet were a country, it’d be the FIFTH LARGEST COUNTRY IN THE WORLD.

Read on as the MSM pick up on what I've been ranting about for 2 years. Virtually every penny of the big banks' profits consists of taxpayer bailout money. This doesn't include the ~60% of revenue paid out as bonuses, of course!

• China drains cash to curb liquidity (FT) - no longer just a New Year issue...
• Hilesnrath speaks (but nobody cares anymore) - Fed Split Over How Long To Keep Cash Spigot Open (WSJ)
• Chasm opening between weak French and strong German economies (Reuters)
• JPMorgan Said to Seek First Sale of Mortgage Bonds Since Crisis (BBG)
• China's Bo Xilai not cooperating on probe, been on hunger strike (Reuters)
• Fed minutes send warning on durability of bond buying (Reuters)
• Sony Seeks an Extra Life in New PlayStation 4 (BBG)
• Rajoy pledges fresh round of reforms (FT) - and by reforms he means kickbacks?
• Doubts loom over eurozone recovery (BBG)
• China Extending Zhou Stay Seen as Aid to Financial Overhaul (BBG)
• King Pulls Out Stops to Energize Economy in Carney Handover (BBG)
• Central Banks Discussed Nominal GDP Targets at G-20 (Businessweek)
• Grand Central Owner Opposes IPO of Empire State Building (BBG)

Day after day, whenever anyone challenges the TBTF banks' scale, they are slammed down with a mutually assured destruction message that limitations would impair profitability and weaken the country's position in global finance. So what if you were to discover, based on Bloomberg's calculations, that the largest banks aren't really profitable at all? What if the billions of dollars they allegedly earn for their shareholders were almost entirely a gift from U.S. taxpayers? The stunning truth is that the top-five banks account for $64 billion of an implicit subsidy based on the ludicrous (but entirely real) logic that: The banks that are potentially the most dangerous can borrow at lower rates, because creditors perceive them as too big to fail. Once shareholders fully recognized how poorly the biggest banks perform without government support, they would be motivated to demand better. The market discipline might not please executives, but it would certainly be an improvement over paying banks to put us in danger.

At Deutsche Bank, the job title “risk manager” might be more appropriately characterized as “campaign manager.” That is, Deutsche Bank is no more concerned with the active mitigation of risk than the unscrupulous politician is with actively avoiding extra marital affairs. Like campaign mangers then, risk managers at Deutsche Bank must accept the fact that occasionally (or perhaps quite often) messes will be made and spin campaigns will need to be devised and deployed in order to keep public opinion from turning sour and in order to keep the few regulators who aren’t on the payroll

Latest from my friend David Kotok.  I think both he and Meredith Whitney are too bullish on the banks

Europe’s banks are totally insolvent and have not been fixed. No EU leader is going to tell you this because their jobs depend on convincing people that everything is fine. Bankia was supposedly “fine” right up until the truth came out. Just like the Wall Street banks were “fine” going into 2008.

Per C-Span: "The Senate Finance Committee will hold a confirmation hearing Wednesday for Treasury Secretary nominee Jacob "Jack" Lew. If approved, he will replace Timothy Geithner. Among the topics he will address include the state of the economy, strategies for reducing the budget deficits, economic ties with China along with questions about global currency war. Sen. Orrin Hatch (R-UT), Ranking Member of the Senate Finance Committee, said in a statement that the "We need a better understanding of his role at Citigroup, what his knowledge is of financial markets, whether he supports reforming our tax code, whether he believes in a robust trade policy and what kind of plan the Obama Administration has to confront our skyrocketing debt and our broken entitlement programs. As we move forward, I’m hopeful that Mr. Lew will answer some remaining questions that I have." According to AP, "After Wednesday's hearing, committee members will have two days to send questions to Lew to answer before they vote. The full Senate could vote on the nomination late this month."

The problem with “too-big-to-fail” is first and foremost the behavior of our beloved political leaders in Washington