Citigroup - thrive or bust?

Citigroup is basically on life support at this point. Pandit laying off more than 50,000 employees, there stock currently trading below $5, which is not a good sign in the financial sector. When stocks trade below $5, they are usually delisted by the NYSE, but can stay on the exchange if they meet certain requirements. Citigroup's strategy is either to merge with another firm or raise capital. So far, there are rumors of three companies who might possibly consider a merger with the troubled institution. They are Morgan Stanley, Goldman Sachs and State Street Bank.

Since Morgan Stanley is facing financial difficulties themselves, I do not think they are in the running. But if I had to take a wild guess, I would say Goldman Sachs. Why? Henry Paulson, the current Treasury Secretary and former CEO of Goldman Sachs. Paulson still has ties to the head honchos at Goldman Sachs, who are actually benefiting from the bailout of AIG (AIG owes Goldman $20 billion, which Goldman denies). So for example, let's say that Citigroup approaches the Fed for a bailout, I am sure that Paulson would be able to convince his team otherwise and have Citigroup merge to stay afloat. State Street Bank is the second largest owner of Citigroup, owning a little less than $5 billion, so that would be a good merger.

I would hate to witness another major bank failure. I do not think the economy can handle it.