The Second Tsunami wave is Coming?

The tumble of the CITI stock and the questions being raised about the health of the Banking giant brings to memory the similarities with other collapses since September of this year. First the stock is jettisoned by traders amid a panic play. Then the risks that are held on and off the balance sheet are debated. Finally, the CEO's name is mud.
In this case, the cycle has been completed and its effectiveness can be seen from the way the Fed and the Treasury have been drawn into the drama. The CITI brand will be saved. What is unclear is what will carry that brand or how the animal will be transformed.
Clearly, the actions taken by CITI in the last one year have been ignored. The capital strength or its franchise/business value has been ignored. The CITI brand is valued at nothing. The fall in stock price by 50% in a week or to levels seen decades ago (when the organisation was smaller/more narrowly focussed) are attracting eyeballs. It appears that the fall in share price is driving the bank to the bankruptcy court or a merger. The enterprise value has been reworked.
There is clearly a warped sense of events here, even if one were to blame its portfolio of bonds and other instruments and assets. Except for the recent worsening of spreads on certain ABSs/Bonds etc, everything else on the balance sheet is/was the same? The fall in valuations, if it is due to genuine fresh issues/events/analysis must be the result of one or more of the following - a) the balance sheet got worse (possible due to the recession) b) fresh discovery of skeletons (speaks a lot about Auditors/Regulators) c) weak strategy (so much has been said on this, but with no clear majority or clarity of thought). None of these seem out of the recent history of ordinary in the financial sector in the world. CITI could not be suffering from more weaknesses than others.
You can see where I am leading you - the second "tsunami" wave is coming. Inspite of what CITI may do now (or may have done in the past) and inspite of all the capital that it may have (plus those billions in spare cash) nothing can stop the tsunami from running over it. If the first tsunami was linked to credit market the second one is simply a self-destructive, market generated panic that has now become omnipresent. If CITI has been targeted it is now easy to target so many other institutions - after,all they all had the same traders, risk managers and they operated in the same markets, they all paid fat bonuses and they are all listed.
Why do we have the second tsunami? I think it is just that while businesses are trying to come to terms and rescue themselves with friendly help from Government/Fed, the problems continue and the balance sheet does not get better: after all, capital can only pay for losses but unless it is deployed to expand business losses cannot be offset by fresh profits. Banks need protection from the second tsunami, not through provision of additional capital but through hiving off poor assets that have threatened to poison the entire balance sheet. Only then can the capital be put to use.
Can TARP be diverted for this purpose? Many more CITIes are in the line.