Vikram Pandit, CEO of Citigroup Inc. (NYSE: C) is being credited for most of today’s rally based upon a memo he sent to employees after last week’s debacle.  We have provided additional data, and a link for the full text of what Pandit really said.  As one trader said early this morning in response, “I’d like to go over that, there is some hair on those statements.”

Pandit’s memo talks about Citigroup’s capital strength with a tier-1 ratio of 11.9%.  On the Fed stress test Pandit noted, “We’ve done our own stress testing using assumptions that are more pessimistic than the Fed has outlined and we are confident about our capital strength.”

He further noted, “In addition to our strong capital position, I am most encouraged with the strength of our business so far in 2009. In fact, we are profitable through the first two months of 2009 and are having our best quarter-to-date performance since the third quarter of 2007.”

We have also inserted a link for the entire text from Pandit.  The real issue here is that some of the data is backward looking despite the current positives.  There are also many who just do not trust anything or only believe that good news is relative and temporary.

As our own Doug McIntyre said, “There is certainly no guarantee that when it comes time to close the books on Q1 that a lot of the troubled asset on Citi’s balance sheet will not have to be written down. It may also have to account for credit card defaults and failure of some of the LBO loans that it made.”

So far, the doubters are not winning over the believers.  Citi shares are up 25% at $1.32 after 40 minutes of trading.  We have also seen a full day’s worth of trading volume.

JON C. OGG

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