Citi to sell Smith Barney; feds tightening grip

Vikram Pandit, CEO of Citi, has been forceful in his assertions that size was Citi's strength, and that he would not break up the company. He caught a lot of flack, but he seemed to be sincere. So what should we make of the news that Citi is in talks to sell a majority interest in Smith Barney to Morgan Stanley? There's also news that it aims to sell Banamex, its Mexican retail unit.

Analyst Dick Bove speculates that the government is tightening its grip on the bank--the price of the TARP. Indeed, Citi also has reversed itself and now supports a controversial bill that would give bankruptcy judges the right to waive some mortgage debt, which could force more write downs on banks. So you've got to wonder: Who's really steering this ship?

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