C is interesting because it's too large and too important for the government to ever let it fail. In addition, a lot of foreign capital is invested in it so that's an additional support.
But the writedowns here have been *massive* and I expect them to continue throughout the year. They're probably going to need even more money to shore up their balance sheet. Could the stock move lower as the situation unfolds? Absolutely.
For the LONG term is it a buy? You would have to think so. Every time Citi has run into similar troubles (and there have been other instances!) it has paid to invest when they were at their most down and out. A lot of money has been made this way.
For example, John Neff made a lot of money on Citigroup in the early '90s while running the Vanguard Windsor Fund. I've included the link below to the prologue of his book where he talks about this incident. It's very instructive. You will note that he started investing in the beaten down stock in 1987 and it didn't pay off until 1992. I expect a similar amount of patience will be required this time around.
http://books.google.com/ Another thing I would like to point out about Citi is that there seems to be something terribly wrong with the institutional culture. A well-run company doesn't fall apart every 10 years and have to go through a major rebuilding. I'm not sure what it is but there is something horribly wrong with the company's culture. At some point in our lifetime I expect it will finally be broken up and the pieces sold to other companies because you just can't run a company this way for the long term.
To sum up, I think you can buy C here and it will *eventually* pay off but likely it will take quite awhile, and you will probably have a chance to buy it even cheaper in the next year or two. My personal preference would be to wait until we get some more clarity on the current situation.