Mr. Market struck a dour note as it digests the on-going Citigroup's (C) TARP repayment plan and the bank's anemic secondary offering. We've noted that the dilution could be rather extreme, to the tune of 25 percent, depending of course on where the deal prices. So while the government seems to be getting a fair shake, it's unclear what shareholders will suffer through.

Forbes notes that Citigroup's stock price may remain well below the $5 limit that some institutional investors, money managers and financial planners stick to when making equity purchase decisions. And it's unclear how the loss of the government's guarantee on $250 in debt will affect the bank. The biggest wildcard remains the economy and the government's plans to dump its shares.

We've said it before that one big worry here is a sort of double-dip economy that takes the bank down even lower. The bank has raised a lot of capital and reserved against losses. "But last year made clear that the value of banks' collateral can fall more sharply than anybody had thought possible." The issue then would be whether the public would tolerate another bailout. My sense is that the public would not. So, we would be in uncharted waters. 

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