CNBC is reporting that talks between Citigroup and Amaranth have fallen apart. It had been reported that Citigroup was considering a large stake in the fund. The collapse of these negotiations—and the possibility that they collapsed because Amaranth is in even worse condition than its managers have let on—is likely to prompt even more redemption notices from investors.

Amaranth continues to claim that it plans to stay in business but many employees are reportedly not even showing up to work. One friend of ours at a prominent Wall Street firm tells us he's already had two Amaranth resumes cross his desk.