Citigroup (NYSE: C), whose financial colleagues include Bank of America (NYSE: BAC) and Wachovia Corp. (NYSE: WB), reported results for the third quarter on Thursday. And they tell me that, no, we haven't seen the end of the issues plaguing the financial sector.

Not that I necessarily thought the data would. Revenues from continuing operations decreased a whopping 23%, coming in at $16.7 billion. Net loss from continuing operations was $3.4 billion. This compared to a net profit of $2.1 billion in last year's similar quarter. The loss per share from continuing operations was $0.71. The big driver was, of course, a major collective write-down in the Securities and Banking category. Citigroup had to eliminate $4.4 billion of value in this area. Just about all the numbers in this report inspire no confidence. As market volatility to the downside worsens, assets under management are taking a hit. The Institutional Clients Group saw a major drop in its revenue base, diving 48%. And according to this source, this is the fourth quarterly loss for Citigroup in a row. In addition, JPMorgan Chase (NYSE: JPM) is now the largest bank in terms of assets. This major financial brand has taken quite the fall.

Citigroup is going to continue to have a tough time as the market and the consumer make their way through the credit crisis. The negative wealth effect that is surely coming (if it hasn't already arrived) will cause further deterioration in Citigroup's value. Earlier in the year, I was bullish on the company as a value play. I certainly no longer am. I see the bank's stock breaking through its 52-week low. I think the company will ultimately survive, but I can't say I'm entirely confident about anything in these days of surreality.

Disclosure: I don't own any company mentioned; positions can change at any time.

Charles Peabody, a famous banking analyst, has been down on the prospects of financial companies for a number of quarters. He now sees some of the stocks in the sector as good buys.

Peapody's change of heart may be coming at the wrong time. A number of observers believe that it is healthy that firms like Citigroup (NYSE:C) are taking huge write-offs. But, if the housing and credit markets keep falling, losses could still balloon.

According to Reuters, Peabody, a widely-followed expert says "Bank shares could rise 35 to 45 percent on average from their first-quarter lows, amid signs the housing market might be bottoming out."

Peabody's thinking is based on a premise that is probably flawed. He sees the recession as making a bottom now. Any near-term recovery should indeed aid bank stocks.

With energy and commodity prices rising, consumers in trouble with debt, unemployment moving higher, and a weak dollar, it is hard to see how Peabody draws his conclustions.

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