Goldman Downgrades Citigroup With Conviction

Analyst William Tanona issued a few downgrades this morning that sent financials into yet another tailspin.  In particular, Mr. Tanona added Citigroup to its "Americas conviction sell" list, Goldman's version of the America's Cup of short-selling targets.  Mr. Tanona claimed that Citigroup will more than likely suffer roughly $9 billion in write-downs and will be forced to cut its dividend and sell more assets.  He slashed his earnings for Citi and Merrill from previous forecasts of small profits to large losses and lowered his rating on the entire brokerage sector to "neutral" from "attractive."  I'm not sure what Mr. Tanona considered particularly attractive about the brokerage sector before his downgrade today.  If anything, the brokers look far more attractive today at a 20%-50% discount to where they were trading just a few months ago.  Other than a rash of brokerage firm downgrades, much of the negative news that has been released recently was mostly anticipated by investors.  Investors expected the monolines to be downgraded and anticipated massively dilutive capital raising schemes by the banks.  Dividend cuts?  We knew they were coming.  Rumormongers knew that Lehman was hiding something.  The only thing that has really changed since the market hit its lows in March is that the "Worst Is Over" monkeys have stopped banging their cymbals.  Needless to say, I agree with Mr. Tanona that Citigroup remains a sell, even at these depressed levels.  Furthermore, I admire his conviction.