Meredith Whitney, the outspoken US analyst who predicted Citi's problems more than a year ago, was at it again earlier this month when she said the scale and complexity of the bank's woes were such that it would take renowned physicist Stephen Hawking four years to turn Citi around.

The US government may have saved Hawking a job, but it does not take a quantum physicist to realise that the bank's problems are far from over. The bailout proves the US government came to the conclusion that the bank is too big to fail, but it remains too big to manage. Massive disposals will now follow.

American taxpayers are now effectively insuring a $306 billion portfolio of troubled Citi assets in exchange for a hefty stake in the business.

Having the government stand behind it will prove more comfort to the market than Saudi prince Alwaleed's futile support operation last week.
The shares rout should stop today. But make no mistake. Today is a catastrophic judgment on chief executive Vikram Pandit.

When he arrived a year ago, he should have instantly and dramatically set about de-risking Citi's portfolio and slashing costs. If Whitney could see the rotten heart of Citi, Pandit should have seen it too.

Instead, we had repeated promises that Citi's black hole of toxic debts could get no deeper. It did. Again and again.

As one critic said, inept management was today rewarded by the US government.