Citi is 27% owned by the government, has multiple vertical markets (insurance, brokerage, credit cards, mortgages, investment funds, etc.) - it looked like that after the government bailout they might have been able to get their head above water, but they fell short a month ago - when their large middle east investor and government (who tried to left them off the hook a little) back-fired and sent the stock back down  well below $4.
                Now after having a 3 quarter profit streak (which is choked full of skepticism - from accounting changes, back-door bailout, TARP, etc.) they now face a $7.6 billion loss (citing of course the costs to exit the government's bailout). What happen to all those profits? Oh wait, they are not really profits - are they - if they are subsidized. The 4th quarter loss of 33 cents, was worse than estimated. Analyst knew the losses were coming and their success (governed by bailout).
                Pandit (the CEO) - who took control of the company in Dec 2007 (after Chuck Prince was fired) - said he would only take a $1 salary a year until Citi turned profitable. Of course he failed to mention that he sold his hedge fund to Citi right before he took the job and personally received $165 million for it (only to watch the hedge fund go bust the following year). Now after two years and seeing other banks bounce bank - investors want to start seeing the light at the end of the tunnel - not more losses. The stock had rallied to $5.50 by the 3rd quarter only to fall back down below $3.50. The honeymoon, government bailouts, and fund raising is over - it is time to start seeing results.
                Now many are saying the next shoe to drop on the large financial institutions is the commercial real-estate market as a large amount starts coming up for refinancing add to that the Obama "FEE" (TARP TAX) and it's going to put more pressure on this struggling financial firm.
                I have a feeling that Citi is the GM of the financial industry.
 
                The futures came under pressure this morning when Citi released their data. Stock is down in the pre-market.
http://www.cnbc.com/id/34932328

                        Is the recession over? Sovereign credit risk continues to be on everyone's mind (Greece and Spain have seen significant drops in their credit ratings). This morning German Investor Confidence falls more than estimated, showing signs of their recovery losing momentum. Economists expected the confidence number to increase, instead it fell below 50 to 47.2. The economy shrank 5% last year, it's worst performance since World War II.  Optimistic euphoria drove markets higher into the end of the year, but as economic data shows that the growth is last robust after belief that the recession was over is starting to reflect some dragging concerns and that the largest European exporter may face struggling growth. The Bond market is also showing that it may take more than initially thought to see full recovery levels reach to government deficits/debt levels. Bonds returned less than 2% in 2009 as sales increased 36% and sales expect to increase 15% this year.
                The word's "double dip" is starting to make the rounds on the financial shows when referring to Europe and it would seem from the investor confidence they are starting to realize that it is a possibility. All eyes will be on Europe and also the strength or weakness of the Sovereign Debt of countries like Greece.
                The news is creating a slight drag on pre-opening futures. http://www.bloomberg.com/apps/news?pid=20601087&sid=awSLZF7gNFBY&pos=7
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                        After a few months of screwing around it finally seems that Cadbury (the confectionary) has accepted Kraft's takeover bid, valuing the deal at 19 billion.  It is a cash/share deal (Kraft paying 500 pence in cash and .1874 shares of Kraft). The original deal was for 745p per share. There is also a 10p bonus for Cadbury share holders once the deal is declared unconditional. Buffet had already scoffed at the deal (the largest share holder) when Kraft had initially purposed using their shares - citing the company's shares are valuable equity that is probably worth more. Kraft went back to the drawing board and looked to raise more cash - fearing that they might face some shareholder disapproval.
                The problem that is currently being cited that Kraft may face some damage to its credit rating and some are unsure how much this will add to their bottom line. It is in the same vain that Buffet pursued in his Berkshire's takeover of the rail shipping company. Now is the time that money is very cheap and with inflation concerns on the rise, borrow heavy now and convert to hard asset value. Locking in low rates. If Buffet is right - his deals (along with companies like Kraft) may show this is the time to strike before rates move higher and inflation becomes the primary concern.
 
Cadbury trading higher in the UK and expect Kraft to be under pressure this morning.
 
http://www.cnbc.com/id/34931117

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            The futures are coming off their lows after the Citi report, but are still off and we should see the futures under pressure.