Imagine that you go to withdraw funds from your checking account, only to find that you must give your bank seven days prior notice of the action. Does that sound outlandish? This regulatory fine print has been made all too real for customers of Citibank (C).

In an informational snafu that got out of hand, Citibank notified its customers that it has the right, or the responsibility, to delay customers from retrieving their own money in certain rare instances. The misstep occurred when Citibank included this revelation on the statements of its customers nationwide.

A rose is a rose is a rose. Thank you Gertrude Stein for that observation. But a bank is not a bank is not a bank. That's because not all banks are serving the same market, nor are they all offering the same loans. If you're going to invest in banks, be sure you understand who they're lending to and what kind of loans they have on the books.

The first group of banks is community banks. As you might guess, they serve specific communities, usually within a fairly narrow geographic region. They rely on that region for their deposits with which they'll make loans, and loan demand. In other words, they serve a well-defined community. They know all the neighbors, participate in the local activities, have a high profile, hopefully do good things for a community.

The Wall Street Journal (subscription required) reports that the FBI is looking into a potential computer-security breach that resulted in the theft of tens of millions of dollars from Citibank by computer hackers.

These hackers appear to be linked to a Russian cyber gang who targeted Citigroup's (C) Citibank subsidiary, including its North American retail bank and other businesses. This attack was detected over the summer, but there is a chance that it could have happened as much as a year earlier.

On Friday, Citigroup Inc. (NYSE: C) filed suit in U.S. District Court in Manhattan against rival Morgan Stanley (NYSE: MS) for allegedly breaching a credit-default swap agreement. The suit seeks unspecified damages.

The complaint alleges that Morgan Stanley, which recently announced that its CEO will step down, failed to live up to its obligations regarding the 2006 agreement. Citigroup's Citibank unit says it entered into CDS with Morgan Stanley to protect the bank against losses from a revolving credit line that it entered into with a collateralized debt obligation known as Capmark VI. The CDO was scheduled to mature in 2038, but its performance declined substantially after July 2006 as a result of the global financial crisis.

On Thursday morning, Citigroup (NYSE: C) announced that it is going to lower the number of U.S. retail outlets, limiting the banks to six major metropolitan areas. The Wall Street Journal reports that the bank will also limit its lending mainly to wealthy customers. Citigroup chose to take this step in order to control the amount of its consumer lending, limiting its transactions to credit cards and jumbo mortgages.

According to the report, Citi will release its plans in October, when we should learn that the bank will be a presence mainly in New York, Washington D.C., Miami, Chicago, San Francisco, and Los Angeles. That said, it turns out the plan could be contingent upon approval from the U.S. Government. The report notes that some Citi executives are concerned the government may not issue approval.

The market was down almost all day, although it did make a few runs at going positive. The Q4 GDP data was even far worse than the revision estimates. While there is very little good news on the headlines, it does seem as though buyers are starting to nibble on positions. The end of day drop today looks like it was an index rebalance issue for month-end, although there could always be the fear of holding into the weekend. In that case, today almost felt like a win. Here are today's unofficial closing bell levels:

Dow 7,068.66 -113.42 (-1.58%)
S&P 500 735.50 -17.33 (-2.30%)
Nasdaq 1,377.84 -13.63 (-0.98%)

Top Analyst Downgrades
Top Analyst Upgrades

Yep, you guessed it. Someone has devised an index to track the value of international and marketable art works. Michael Moses, founder of the Mei Moses Art Index, uses the recent auction prices of museum quality art to determine the appreciation of various works of art.

So now, let's take this a step further. Suzanne Gyorgy is the head of the art division for Citibank(NYSE:C). When she looked at the balance sheets of bank customers, she found that many of them included works of art as an asset group. Being creative and seizing on an opportunity, she set up a loan division at Citi that specializes in collateralized loans based on valuable art works. A client can obtain a loan of up to 50% of the underlying value of the art. To determine its value, Ms. Gyorgy has a nine member team of specialists in this field. Once the value is determined the loan can be made. Most loans fall between $5 million and $100 million.

Today was all about financial bailout packages being on and off, and on and off, and on and off. Financial stocks were most of the news, but you've heard enough about that you will only hear about non-financial companies today. Q2 GDP was revised lower than original projections, but that number is older than dirt now. The funny thing today was that they started ringing the closing bell on NYSE a minute early on accident.

Below are the unofficial closing bell levels:
DJIA 11,160.49 +138.43 +1.26%
S&P500 1,214.56 +5.38 +0.44%
NASDAQ 2,185.56 -1.01 -0.05%
10YR T-Note 3.827% (-0.035%)
TOP ANALYST CALLS
52-Week Lows

KB Home (NYSE: KBH) posted really ugly numbers with its losses growing four-fold and sales down over 50%. Yet somehow, traders are hoping a bailout will drive the future. Shares were actually up 1.2% at $21.42 immediately before the close.

Research In Motion Ltd. (NASDAQ: RIMM) was downgraded across the board after its earnings disappointment. Shares were down 26%, or $21.50, right before today's close.

Marvell Technology Group Ltd. (NASDAQ: MRVL) was crushed on R-I-M's disappointing numbers. Shares hit a new 52-week low and were down 10.4% at $9.64 in the final minutes of the day.

Potash Corp. of Saskatchewan (NYSE: POT) was down over 7% in today's final minutes at $146.57. An analyst downgrade from RBC and a cautious sector call from Citi is to blame. The concern here is easy. Farmers are having their credit cut and they can't afford to pay endless increases in agriculture prices.

We're reading monthly about numerous U.S. financial institutions needing to turn to foreign governments for money to stave off financial disaster. While some investors cry foul, alluding to nefarious plots to take over America, Bloomberg examines uber-investor Warren Buffett's take on what's occurring in the economic world today.

Instead of some global plot against the U.S., Buffett says that investments by foreign government-controlled firms are fueled by U.S. spending overseas, not political motives. These so-called sovereign wealth funds are merely responding to some to our own activities.

"This is our doing, not some nefarious plot by foreign governments,'' said Buffett, chairman of Berkshire Hathaway Inc. (NYSE: BRK.A), in his annual letter to shareholders. "Our trade equation guarantees massive foreign investment in the U.S. When we force-feed $2 billion daily to the rest of the world, they must invest in something here.''

Bloomberg reports that countries like China, Russia, and Dubai have deployed record central bank reserves to set up funds to invest as much as $2.9 trillion. We've already seen a flurry of activity. Investment funds from Singapore, Korea, Kuwait, and Abu Dhabi bought stakes during the past four months in the largest U.S. bank in terms of assets, Citigroup (NYSE: C), and Merrill Lynch (NYSE: MER), the world's biggest brokerage.

Zack Miller is the managing editor of IsraelNewsletter.com and a former equity analyst for a leading multinational hedge fund.

The M&A rumor mill hyping a buyout of Lexmark International Group (NYSE: LXK) by Xerox Corp. (NYSE: XRX) has been silenced. On Friday, when Xerox reported a 53% drop in third-quarter earnings, company CEO Anne Mulcahy commented on a suggestion that her firm might be looking to buy rival printing concern LXK.

She quickly put these allegations to rest, noting: "I don't think Lexmark is an ideal candidate . . . there is nothing [it] would bring to the table that would be really value-creating for us."

But Mulcahy certainly is not acquisition-averse; she has overseen Xerox's purchase of four companies in the past 15 months. She noted that Xerox hasn't ruled out deals with smaller companies that would help bulk up her company's software offerings.

In June, I wrote a nice rant about credit card offers I was receiving with the words "Remove contents before you discard." I thought, and others agreed, that the offer implied that I needed to open the envelope to avoid the risk of identity theft.

Now Citibank is attracting controversy by mailing 3.5 million credit cards to department store customers who didn't ask for them. The cards are being sent to customers who who have had inactive accounts for more than two years.

According to CNN, "A federal law dictates that banks can issue credit cards only when customers request them or they replace existing cards. Citi considers the cards replacements to the Macy's cards already accepted by the customers."

Calling new cards sent to customers have been inactive for two years seems pretty aggressive, and consumer advocates have expressed concern that the personal information of customers could be breached.

Citi is playing pretty fast and loose with the law here. Customers shouldn't receive credit cards in the mail that they didn't ask for and don't want -- and that is exactly what is happening here.

A feature story in BusinessWeek provides a sad commentary on the immorality of the credit card industry: Citibank was offering college students $5-10 for every one of their peers that they can talk into filling out a credit card application. The former student credit card pusher featured in the story knew nothing about consumer credit when he was signing up his friends, and currently has $13,000 worth of credit card debt of his own.

What's wrong with this picture? Citibank was relying on an untrained salesforce being paid completely on commission: Student marketers were reportedly told by a Citibank representative that they could assuage students concerns by telling them that "It's easy to pay off your balance once you graduate and get a great job." Hmm. Another BusinessWeek story discusses the sad plight of a student who racked up so much debt he ended up dropping out to repay the money.

The marketers had no real training in the products they were pushing, and it's not hard to imagine that, in their eagerness to sign up other students, they engaged in deceptive marketing practices and did a poor job of explaining what their prospects were getting into.

Of course, Citibank had to have known that this would happen, but that was the beauty of it: By recruiting students to do it, they had no knowledge of or, in theory, responsibility for the deceptive marketing: a Chinese wall had been constructed.

This is an absolute travesty, and state attorney generals need to investigate credit card marketing tactics on and around college campuses. Students are being exploited and someone should end up in jail.

Citigroup is about to release quarterly financial performance figures for its first quarter, and I'm all set to see what one of the largest and most diversified financial companies in the world has to say. Peter's earnings preview here hit all the main points that surely will be brought up in today's conference call:

• Citi's management depth and where it is going (acquiring Old Lane is a start)
• Citi's massive layoff announcement from last week
• What affect the subprime lending implosion is having on Citi

Well, those topics and others are set to be talked about along with the specifics of Citigroup's performance from January to March of 2007. Will Citigroup meet or beat expectations (or fall short)? We'll soon see -- so let's get to it. Remember to use the "Refresh" button on your web browser to refresh your screen ever few minutes for updates. All times below are in EST. To get the lowdown on the results, see Citi's release here.

11:30am -- I'm waiting on the Citigroup webcast to start. Still listening to decent "on hold" music. It's not bad, really.

11:32am -- the conference call starts with CEO Chuck Prince. Formal remarks start about the specific revenue figures and other related financial details on Citi's latest quarter.

Each year Steven Halpern, editor of TheStockAdvisors.com, surveys the leading financial newsletter advisors asking for their favorite stocks for the coming year. This article is part of his 24th annual Top Picks Report.

Citigroup (NYSE: C) is the favorite conservative idea for 2007 from Dr. Mark Skousen, editor of Forecasts & Strategies and the host of the annual FreedomFest investor think tank.

"Citigroup is the most dominant banking institution in the history of the world. As the world's largest bank, it has over 200 million customers, and branches in over 100 countries. During the 1980s and 1990s, Japanese banks dominated the world. But Citibank has returned to its glory.

"What about the Citigroup, the stock? In addition to Citibank, Citigroup owns Salomon Brothers, Smith Barney, Traveler's, Primerica, and other financial services.

"And business is good. Profit margins at Citigroup are an outstanding 29%, and the bank has had a policy of paying a rising dividend for years, with a current quarterly dividend of 49 cents, or a 3.5% yield, one of the highest among Dow stocks.

"The stock is up 12% for the year, but continues to languish behind other financial institutions, such as Goldman Sachs, which has doubled in the past year. According to the technicals, Citigroup is in a clear investment uptrend. And despite being downgraded by several Wall Street analysts lately, Citigroup appears poised to move higher."

To see Mark's speculative favorite for 2007, click here.

I worked at Wachovia Corporation (NYSE:WB)'s predecessor, First Union, in the heady early years of banking consolidation. My boyfriend at the time worked for the cross-town rival, NationsBank, now Bank of America Corporation (NYSE:BAC). Our bosses were married, coincidentally, so we got lots of peaks into the personalities behind some of the biggest banks in the country. At the time, I was in Loan Syndications, meaning that each month brought a new opportunity to meet & greet the local frontliners in all the world's banks -- and every time a new bank acquisition came across the pike, we had both one fewer contact and instant access into merger scuttlebutt.

Let's just say that, when I read in the Chicago Tribune about the Morgan Stanley report claiming that both Bank of America and Citigroup Inc. (NYSE:C) were leading takeover targets, I said (much like blogger Ticker Sense), what the flip? Hardly. Not only, as Ticker Sense points out, are Bank of America and Citigroup the fourth- and fifth-largest companies in the country, and as a result: entirely too big to be bought out. But, also, it's just not in their corporate personalities. Hugh McColl, longtime CEO of Bank of America and, though he's retired, a manager whose spirit will always be redolent in the corporate decision-making, is a buyer, not a seller. He and his counterparts at Citigroup have been locked in a battle of one-ups-manship to secure the title of biggest bank in the nation for years, and neither would be likely to give up said title for a little (questionable, in the huge conglomerate that would result from any acquisition) value for shareholders.

There's going to be no takeover here, not with Bank of America or Citigroup at the short end of the stick. Maybe the two company's stocks are cheap (Bank of America closed today at $54.56, a decline of 7 cents and only a dollar away from its 52-week high; while Citigroup closed at $50.31, a $0.46 decline, and also about a dollar away from 52-week high), but that says "buying opportunity" to me, not "takeover target."

Want to buy a buyout possibility? Now Wachovia ... that's a possibility.