Citi’s balance sheet: bases are still loaded

Baseball isn’t in season, but the national pastime lives on in credit crunch metaphors. On Tuesday CIBC analyst Meredith Whitney responded to Citi’s (C) sale of a big convertible preferred stock stake to Abu Dhabi with a report suggesting Citi will still need to sell billions of dollars worth of assets and cut its common stock dividend. Earlier this month, Whitney paved the way for CEO Chuck Prince’s exit with a report advocating a dividend cut. Her latest salvo sent Citi shares down more than 1% even as the market posted a broad rally. The Whitney comment getting the biggest play Tuesday was her prediction that Citi’s mortgage losses will “mount at an alarming rate” in coming quarters. In making that forecast she also argued that Citi faces additional writedowns on its holdings of collateralized debt obligations — and there the link to the sport that ranks up there with mom and apple pie.

“CDO write-downs are ‘first inning’ issues,” Whitney warned. Her remarks come just two weeks after Wells Fargo (WFC) chief John Stumpf told investors that the housing crisis has a long way to play out. “I don’t think we’re in the ninth inning of unwinding this,” he said Nov. 15, Reuters reported. “If we are, it’s an extra-inning game.” Obviously, no one wants to see one of those.