Her warning then:
Whitney began work on the report in early October, after Citi reported a dramatic decline in earnings and took a third-quarter writedown of $6.5 billion. She issued the report to coincide with the Fed's Oct. 31 meeting, which warned of slowing economic growth. That was bad news for banks, which already have reported huge writedowns related to subprime mortgages.
Whitney reasoned that given the current economy, the bank didn't have the means to boost its capital ratios through organic growth. She argued that cutting the dividend or selling assets was the only quick way to raise cash. She predicts that "in six to 18 months, Citi will look nothing like it does now. Citi's position is precarious, and I don't use that word lightly," she says. "It has real capital issues." Citi is likely to report an additional $8 billion to $11 billion in writedowns for the fourth quarter.
And now:
Citigroup Inc. is expected to announce a sizable dividend cut, cash infusion of at least $10 billion and write-down of as much as $20 billion in mortgage-related investments as part of its fourth-quarter earnings report, people familiar with the plans said.