Wall Street has to wonder why so many structured investment vehicles are being downgraded now? Are they really worth so much less than they were a month or two months ago? Since many of their assets do not trade due to a lack of market liquidity, there may never be an answer.

According to The Wall Street Journal (subscription required), "Debt-rating agency Moody's Investors Service, signaling a new turn for the worse for some bank-affiliated funds, said it downgraded or put on review debt totaling $119 billion that was issued by structured investment vehicles that have been paralyzed by lack of investor appetite." The value of many of the SIV assets linked to mortgages dropped by 22% between October 19 and November 21.

Citigroup (NYSE: C) has a continuing problem here. The financial paper adds, "the drop in the market values and the inability to finance the SIV debt is expected to put new pressure on banks such as Citigroup to support the billions of dollars in debt that SIVs face having to pay in coming months."

All of this raises the question of whether the $7.5 billion stake that Citi sold to an investment arm of the Abu Dhabi government will be enough to support the bank's need to improve its balance sheet, or whether it will have to raise additional funds. It begs the question of who would want the job of being Citi CEO, or whether chairman Robert Rubin will have to step into the spot in an attempt to get back some market confidence for the bank.

One thing is virtually certain. Some of the SIVs are near failure. HSBC (NYSE: HBC) took $45 billion in SIVs onto its balance sheet. The bank would not have done this unless an extreme measure was required. The same decision may have to be made at Citi. At $33, down from a 52-week high of $57, many investors think the bank's stock has bottomed.

That would be a mistake.

Douglas A. McIntyre is an editor at 247wallst.com.