Usually when there are rumors that management is being changed at a company, its shares go up.

There are stories flying around Wall St. that the Citgroup (C) chairman Win Bischoff will be pushed out in favor of former Time Warner (TWX) CEO Dick Parsons. Parsons did nothing for the huge content company other than warm the seat in the corner office. He has also been on the Citi board long enough to be partially to blame for the bank’s misfortunes.

The market is more worried about Citi’s future than it is excited about change and the bank’s shares are down over 10%, back below $6.

The cause of the sell-off in Citi’s stock may be a belief that the bank will write-off another $10 billion for the most recent quarter. Some analysts are also speculating that the $3 billion that Citi might get from Morgan Stanley (MS) for 51% of Smith Barney is highway robbery.

The last and perhaps most probable reason for the stock to fall is that it is on its way back to $3. It was there last when investors were concerned that the bank would fail and the government would have to rush in to marry it to another big money center operation or nationalize it the way that AIG (AIG) was. As the economy worsens and the chance for write-offs rises sharply, Citi is still far from being out of harm’s way.

The bank still may not make it out alive.

Douglas A. McIntyre

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