Citigroup proves it can do little right; closes another hedge fund

For Citigroup (NYSE: C) to regain the confidence of Wall Street it will have to start doing a few things right. Firing 53,000 people probably does not qualify. After that news, Citi hit another 52-week low at $7.80, down from a 52-week high of $35.29.

More losses won't help. Some bank analysts believe that Citi's consumer credit portfolio and derivative assets will cause negative earnings right through 2009.

Now, the big bank gave investors another reason to turn their backs as it closed one more of its hedge funds, which lost 53% of its value in a month. Taking the value of assets down that much in such a short period probably requires as much skill as showing an increase of a similar size. In other words, it is extraordinary.

According to the FT, "Citigroup is liquidating its Corporate Special Opportunities hedge fund after it lost 53 per cent of its value last month, marking the ninth time in recent months that the bank has had to close or rescue a fund." At its peak, the fund had over $4 billion in assets.

The point in this is not only that Citi keeps making mistakes. In addition, the bank might as well fire its entire public relations and corporate communications staff. They are of no use to the firm as long as it keeps cutting its own throat in front of the press and shareholders. Dispensing with the PR group could be part of the big, planned layoff. No one would miss them

Douglas A. McIntyre is an editor at 24/7 Wall St.