Meredith Whitney, the most accurate of the banking analysts (and even she has said she was too conservative on how bad the losses would be) has deemed Citi to be beyond redemption. From an interview in the New York Post (hat tip reader Dwight):
“Pandit and his executives are completely naive if they think the share price is not important” …“Pandit is wrong, Citi will not be able to stay in its current form,” she said, adding that the banking giant must break itself up and sell off the pieces to raise capital and reduce its size…..
“Citigroup is in such a mess Stephen Hawking couldn’t turn this company around,” the money maven added. “It has lost the most money of all the banks, and has the greatest leverage.”….
“Citi is wrong if they say they are adequately capitalized. No bank is adequately capitalized today and Citi is no exception,” she said….
Whitney expects the Citi share price to keep falling until Pandit takes decisive action – but warned it has not got much farther to go.
“The company cannot raise capital, there are no buyers even if he [Pandit] wanted to sell Smith Barney,” Whitney concluded.
From the BBC report, “Citigroup seeks ‘emergency cash‘”:
Executives of Citigroup, one of the biggest banks in the US, are in emergency talks with the US Treasury to gain much-needed funding, reports say….Chief executive Vikram Pandit told employees on Friday that the firm did not want to change its business model, Reuters reported, citing two employees…
But Sean Egan, analyst at ratings agency Egan-Jones Ratings, said, “Citigroup needs a deep-pocketed investor that is ready, willing, and able to step up in the next few days.”
“The only one who comes to mind is the government,” he said, adding that $50bn might ne needed.
In a bid to reassure investors, Citigroup is running advertisements in US and international newspapers on Sunday underlining its stability.
The ads have been widely reported, and suggest that the bank simply does not get how bad its situation is. Most of the comments about Citi’s supposedly solid finances overlook the fact that it has over $1.1 trillion in off balance sheet assets (versus official footings of $2.2 trillion). Even the usually skeptical Financial Times hews to the party line:
Citi is in no danger of bankruptcy. It recently received a $25bn investment from the Treasury and its credit is backed by the Fed. Its counterparties are not scrambling to put their business elsewhere, as was the case with Bear Stearns and Lehman.Moreover, the Fed, which was involved in trying to save Bear Stearns and find strategic alternatives for Lehman, has taken a more hands-off approach, say people familiar with the matter.
And per the comment about the Fed above, the authorities might not get it either. Several media outlets have said the authorities’ ability to act is constrained by the fact that Citi is not in really bad shape.
While the press reports continue to say there are no signs of deposit withdrawal, the depositors at real risk are not most retail customers, but business customers, particularly small to mid-sized companies who find it operationally too difficult and costly to spread deposits so as to keep the amount at any one bank below the FDIC limit. It is only one data point, and thus should be treated with caution, but said that his bank was seeing significant inflows from Citi customers, as his bank did when WaMu was floundering. Similarly, another source of exposure is foreign depositors in countries with limited deposit insurance.
While there appears to be no immediate trigger for a crisis, the plunge in the stock price has put an uncomfortably bright light on the bank. If Citi flails around for too long with no remedy, the worries will feed on themselves.
ndk 
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I’d like to know how much assistance Citi is already getting through the Fed’s myriad `liquidity’ programs, and where that cash has been going.
Anyway, Reuters reports that the White House is denying that talks are taking place. Which means nothing.