Well, even after the pre-announcement, Citigroup's loss was bigger than expected. Still, it seemed to take people by surprise. That the bank's woes may linger into the fourth quarter was another bitter dose of rancid medicine. Big banks with lots of retail banking seem to be more exposed than their investment banking brethren. True, both share the pain from CDOs and to an extent CLOs. But the losses from mortgage delinquencies were even bigger than pre-announced. So you have to think that Bank of America and JP Morgan are in similar straights. When all is said and done, the trading prowess (the accounting issues notwithstanding) and ability to hedge has really set the investment banks apart. At least Citigroup could cushion the losses via the U.S. Trust sale.  

For more:
- here's an article

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