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IRRELEVANT RESEARCH NOTE OF THE DAY: Deutsche Bank's Mike Mayo warns that "recent risk management mishaps seem to violate the terms of Citigroup's prior agreement with regulators, which in our view increases the likelihood that new restrictions may be placed on Citi, such as the inability to pursue acquisitions. If so, this can further hurt the company's growth rate and flexibility versus peer [sic]." [emph. added].

Memo to Mike: Come back to reality-land! Citigroup ain’t doing deals anytime soon, regardless of what the regulators say. The company has no CEO and is facing possible additional material writedowns related to its subprime mortgage book, all at a time when its stock trades at 1.2 times book and its capital ratios are sagging. "Flexibility versus peer" is the last thing the company is worried about. (Sorry, no link to note; the sell-side sometimes gets pissy. . . )

Source: Citi's Problems Run Well Beyond 'Flexibility'