No surprise here, but Today Citigroup reported a $9.8 billion loss for the fourth quarter 2007, and is expected to announce a significant dividend cut and possible employee layoffs.  The New York Times reports Citi Posts $9.83 Billion Loss; Will Cut Jobs:

"…Citigroup said it was writing down $22.2 billion because of soured mortgage-related investments and bad loans. The bank is also cutting its dividend by 41 percent and obtaining a $12.5 billion cash infusion to strengthen its balance sheet, including big investments by its former chairman, Sanford I. Weill, and the Government of Singapore Investment Corporation.  "

But I was just thinking about how much Citibank already wrote down in the last couple of quarters:

"…For the full year, Citigroup reported that net income dropped 83 percent, to $3.62 billion, or 72 cents a share, compared with 2006 profit of $21.53 billion, or $4.31 a share. Revenue fell 9 percent, to $81.7 billion in 2007.  "

Citibank actually lost 3.62 billion dollars last year -  and it appears Citibank is staying afloat (along with much of the rest of the US services economy via the investment of foreign capital.

When I think about it, living in NYC, it doesn't really matter to street vendor, for example, who buys hot dogs (could be a New Yorker, could be a European - who cares - the money is flowing.   

For a bank, I guess it doesn't really matter all that  much who is supplying the the money influx, Saudi or Korean money is as good as any - but you have to wonder if the United States is becoming so dependant of Foreign Capital - that at some point, much of the country is going to be owned by foreign interests - including Citibank. 

According to CNN Money - in an article titled Citigroup suffers $9.8 billion loss:

"…here had been intense speculation that the company could announce major cuts to its workforce of more than 300,000, on top the 17,000 workers it said it would eliminate from its payroll last spring."

If Citigroup lays off 20,000 employees, as is feared, how will this affect the job market?  Well, I don't think it's just going to be Citibank that's laying off people - but I do see that as this slowdown, recession trickles down, it's going to severely affect local and state governments, who will also curtail services and start laying off in mass - and that is going to be what might up sinking the ship, here. 

It's not just Citibank - it's what Citibank represents - there's 10 more big banks, just like Citi, that did the same thing - what's going to happen when they reveal all their 4Q earnings?

According to Reuters - Citi likely to announce dividend cut, layoffs: report

"…The largest U.S. bank is also likely to announce more than 20,000 job cuts when it posts fourth-quarter results on Tuesday, the Journal reported, as new Chief Executive Vikram Pandit tries to cut costs."

I think, by March 2008, it will be clear where this is all going - just my gut feeling.