Citigroup’s board members had an emergency meeting this weekend, although their chairman of the board (Chuck Prince) resigned prior to that. Citigroup has lost nearly a quarter of its market value in less than three weeks! Analysts blame increased toner cartridge expenses along with higher office heating bills. Just kidding – their earnings were depressed by mortgage defaults and this summer's credit scare. The news hit all financial stocks last night and into today. While new Citigroup chairman Robert Rubin announced measures to boost accounting at the world's biggest bank, fears that more banks will have to confess to major losses hit Asian and European institutions. The company announced losses of up to $11 billion dollars, significantly higher than the $2.2 billion it had reported for the third quarter in September. "Citi estimates that, at the present time, the reduction in revenues attributable to these (sub-prime related) declines ranges from approximately eight billion to 11 billion dollars," it said in a separate statement.

Speaking of billions, ResCap, the residential lending division of GMAC, lost $2.3 billion in the third quarter attributed to “credit losses, writedowns, and a weakening secondary market”.

Under the “good news” category, rates continue down, and the 10-yr stands at 4.31%. We had a nice intra-day price improvement on Friday on continued concern of bank losses related to mortgage assets after coming early pressure following stronger than expected non-farm payrolls, which rose +166k last month. Compared to last week, this week is very light in terms of economic releases, so maybe we’ll have a non-volatile week? Today we have a relatively unimportant number (October’s ISM non-manufacturing index, expected -.8), Wednesday we’ll see the 3rd Quarter Productivity report, a measure of worker productivity and expected to show a level of worker productivity during the third quarter similar to last quarter’s final reading of 3.1%. Thursday we have the usual Unemployment Claims and testimony by Bernanke before the Joint Economic Committee, and on Friday we have the Trade Balance figures (expect a deficit of $58 billion), October Import Prices (exp +1.0%), and an early November University of Michigan Consumer Confidence Index (exp -0.4).

There are 10-year Note and 30-year Bond auctions this week, Wednesday and Thursday respectively. Strong or very weak results from these sales could affect the momentum in the bond market, and although it is common to see pressure in bonds ahead of these sales as long as interest from investors is decent we should see those pre-sale losses recovered during afternoon trading of the sale days. Mortgage prices today, however, are giving up some of their improvement from Friday.

For anyone in this business who still has a job, here are some work rules:

If you can't get your work done in the first 24 hours, work nights.
A pat on the back is only a few centimeters from a kick in the butt.
Don't be irreplaceable: if you can't be replaced, you can't be promoted.
It doesn't matter what you do, it only matters what you say you've done, and what you say you're going to do.