The Five Dumbest Things on Wall Street This Week: June 27

1. Citi's Slash-Dance

Only two months ago, Citigroup(C Quote - Cramer on C - Stock Picks) signaled that its $15 billion loss in the first quarter should be its last significant setback for a while.

"We believe we have substantially reduced our risk, given the size of the writedowns that we have taken in the last three quarters," CFO Gary Crittenden said at the time.

That may be technically true, to the extent that $9 billion is less than $15 billion. (Shareholders can breathe one sigh of relief: Crittenden can add.)

Crittenden and his Citi colleagues have had a tough week, but not as crummy as the company's employees or shareholders. On Monday, Citi revealed that it would eighty-six 6,000 of its investment banking employees from its payrolls, according to The Wall Street Journal.

Then, on Thursday, Goldman Sachs moved Citi to its "conviction sell list," the brokerage's roster of expected laggards on which no company wants to appear. Goldman cited its belief that Citi would now post a loss in the second quarter, due to an estimated asset writedown of $8.9 billion related to the company's subprime mortgage exposure.

Goldman also noted that the giant bank faces a plethora of risks, including "additional writedowns, higher consumer provisions as a result of rapidly deteriorating consumer credit trends, and the potential for additional capital raises, dividend cuts, or asset sales."

Citi's shares slumped more than 6% Thursday to $17.67, their lowest point in almost 10 years.

Such is the state of Citi. Company spokesman Dan Noonan summed up the problem -- and strategy -- nicely to the WSJ earlier in the week: "Citi indicated earlier this year that it would be resizing this business in response to market conditions and as part of our ongoing re-engineering efforts."

Pesky things, those "market conditions," especially when you bring them on yourself.

Dumb-o-meter score: 91. Despite the negative factors in the broader markets, we continue to see strong momentum throughout the organization with robust volumes in many of our products and regions," said CEO Vikram Pandit in April.

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