There Will Be Blood(letting)

Implications: Citigroup has continued to show losses in global operations, some relating to subprime issues. However, while many of the financial institutions are showing losses, Citi's losses are different, which is a good thing for the investor.

Analysis: "...I think what keeps some investors awake at night is not just so much the bad news that’s currently priced in to current valuations in some of these stocks, but what may come next... and that seems to be another shoe that has yet to drop."- John Brady MF Global

This other shoe could be the credit card portfolios of the major financial institutions. As such, Citi would be a major player in this arena: however, while many of the investing community is "throwing the baby out with the bathwater" by discounting all the players in the financial communities, Citi's problems (both past and the near future) is vastly different from the likes of National City, 5th 3rd, Comerica, Wachovia and/or Bank of America.

Citi still has some remaining MBS exposure, as well as Home Equity and Auto, but no where near the amounts of Merrill, Bear, or other players who went head-first into the Subprime pool. Their costs of operations is within their control, their underwriting on Commercial projects remained true to their credit model, and have been relatively conservative in their lending when others (e.g. BoA and Wachovia) have gone to the other extreme. Keeping this in mind, Citi may actually be 'on-the-cheap' as stock valuations go, with a tremendous upside as other players are shaken-out from their past woes.