Citigroup Raising More Capital. Again. For the Last Time. No, Really.

Citigroup is selling $3 billion $4.5 billion in common stock, raising the total amount of capital the company has scraped together to more than $30 billion since December. Although it had been at least two weeks since the company delivered its miserable earnings report which was greeted with cheers by the market because "the worst was behind us", Citi was back in the headlines with more embarrassing news today. The Wall Street Journal reported this morning that Citi is attempting to avoid being sued by reimbursing Smith Barney clients who were invested in two hedge funds that suffered horrendous losses. If you think you are reading old headlines about Citigroup bailing out its own hedge funds, think again. Citi stabilized another fund called CSO Partners back in February. Today's news dealt with two hedge funds called Falcon and ASTA/MAT that lost 75% and 90% of retail investors' money. It takes a significant amount of investing acumen to lose that kind of money in about three months. It would take me at least six months to rack up losses of those magnitudes. Needless to say, this news didn't help Citigroup's tarnished reputation which Vikram Pandit is desperately trying to restore. Mr. Pandit, I believe, currently has the toughest job in America. Can you imagine having to sit through a risk meeting at Citigoup? I can. It might go something like this:

Vikram Pandit: Okay, let's start with the good news.

Complete Silence

Vikram Pandit: Okay, let's move on then. Any bad news?

Sallie Krawcheck: Vikram, we need to bail out our retail investors who put their money in the Falcon and ASTA/MAT fund.

Vikram Pandit: Bailout? What are you talking about? We don't have any money. All the money we've raised is covering mortgage and credit card losses and that other hedge fund that blew out last November.

Sallie Krawcheck: Vikram, they're going to sue our pants off.

Vikram Pandit: Fine, Fine. Bail them out. Do we still have Chuck Prince on retainer? Maybe he can be our legal council. Also, somebody issue a press release that we're going to issue a convertible.

Gary Crittendon: We already did a convert last November with Abu Dhabi, remember?

Vikram Pandit: Convertible preferred then.

Gary Crittendon: We did that too.

Vikram Pandit: Bond issuance?

Gary Crittendon: Check

Vikram Pandit: I guess we have to do common. Ok, how are the marks doing on our fixed income portfolio? Spreads have come in. How much have we made?

Head of Fixed Income: Based on the marks we have made up, we should only lose another $5 billion.

Vikram Pandit: Fantastic! How are we doing in reducing the size of our derivatives portfolio?

Head of Derivatives: Great! We've whittled it down to about $34 trillion from $35 trillion at year end.

Vikram Pandit: Good work. Clearly the risk has been contained. By the way, has anyone talked to the Wall Street Journal about replacing that stock photo of me where I'm grinning like a buffoon right next to stories about how much money we keep losing?

PR Guy: I'm on it.

Vikram Pandit: What about lunch?

Hot Dog Guy: I brought the hotdogs, but you've got to pay me cash. I don't take your credit.