The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage. NEW YORK ( InvestorPlace) -- Plenty of ugly headlines have been written about Bank of America ( BAC) lately. There's the galling
hubris of CEO Brian Moynihan , stating that the public is too quick to criticize such an altruistic bank. There's the panicked race to recapitalize, including $5 billion from Warren Buffett and the sale of a roughly $10 billion stake in China construction bank. There was an infuriating plan to gouge BofA customers $5 a month for a debit card, which has since been replaced by a less obtrusive campaign to nickel-and-dime them to death. Throw in the -55% performance of BAC stock year-to-date, and a -90% flop from the pre-recession peak, and you've got lots of reasons to hate Bank of America. However, lost in the noise may be the fact that BofA isn't alone in its antics. There are just as many reasons -- perhaps even more -- to dislike Citigroup ( C).
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The worst part is that this second, smaller round comes after Citi has seen significant year-over-year gains in both revenue and earnings each quarter since its return to profitability in 2010. With consistent profits and a dominant role in global banking, it's not like cutting those 3,000 workers will be holding off bankruptcy. This is, of course, part of a larger industry-wide trend. Banking industry layoffs are projected to top 200,000 this year.
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However, the hardest thing about the financial sector is making sense of all the noise. In October, there were
rather shady earnings from BofA, Citi and JPMorgan Chase ( JPM) that moved numbers around a spreadsheet to magically create profits for the companies. Citigroup in particular benefited in the third quarter from a "paper gain" of $1.9 billion, thanks to an increase in the perceived riskiness of its debt and not true business operations. Defenders will point out that in 2010, Citigroup achieved its first profitable year since 2007 -- and has stayed in the black ever since. Also, late in 2010, the government sold its remaining stake in the company, so Uncle Sam is no longer looming large over the operations. But that doesn't necessarily mean the bank is safe and will never need federal aid again. And next time, given the dire straits of the government's own finances and the focus on federal spending, a bailout may be very difficult to come by. What's more, BofA CEO Brian Moynihan recently opined about the "new normal" in retail banking that will lead to much smaller profits. That's even as proposed and planned regulations -- such as the Basel III capital requirements and the so called Volker Rule limiting speculative investments -- have yet to full take effect. It all ads up to a whole lot of uncertainty for the financial sector, and for Citi. Since the financial crisis, this market has showed us time and time again that investors can get burned very quickly if they make the wrong moves. Right now, the financial sector has too many disturbing signs and unknowns. And like Bank of America, Citigroup is one of the biggest offenders -- and, therefore, your worst investment. Jeff Reeves is the editor of InvestorPlace.com. Write him at firstname.lastname@example.org, follow him on Twitter via @JeffReevesIP and become a fan of InvestorPlace on Facebook . As of this writing, he did not own a position in any of the aforementioned stocks. Get the latest IPO date and IPO offering news for the hottest picks on Wall Street 5 best Black Friday electronics deals of 2011 Why Wal-Mart is better than Target