Once again, no one can be surprised by this move, after so much bad financial news and negative press. Citigroup and Bank of America got more bad news last week when their bond rating was downgraded from “stable” to “negative” by Standard & Poor. The initial outlook on both banks is that they’re still shaky, and if they needed to be bailed out again by the government they might possibly tank; my words, not theirs.

At the same time, Bank of America did get kudos saying that they seem to have the best chance to be stable as time goes on. S&P stated that Bank of America has “significantly improved its capital position during the past year and kept its liquidity strong, (though) earnings remain severely pressured.” As for Citigroup, they stated they believe Citigroup’s stand-alone position has improved, while also saying “”increased uncertainty about the U.S. government’s willingness to provide additional extraordinary support to highly systemically important financial institutions in a way that will benefit debt holders.”

What does all of this mean? It means that S&P is worried that these banks might not be healthy enough to totally go it on their own without the possibility that the government might feel compelled to help out in some fashion again, and they’re unsure, based on legislation that was passed last year, if that could occur in the first place. Supposedly the government can step in to help a company pretty much liquidate itself, but only if it’s in a bad debt position. Could the government break up both of these banks like they did AT&T many years ago, but for a much different reason?

It also means that S&P, though worried, believes that if both bank institutions will hold steady and not take unnecessary chances, while shoring up the areas in which they’re losing money (such as credit cards, where it’s predicted that both will probably continue big losses as long as unemployment doesn’t improve) that they could survive, since the biggest worry is both banks being able to continue to pay on their own debt.

Personally, if they had to be broken up I wouldn’t shed a tear; no, I still don’t trust them, even with Citigroup’s new idea on how to eases foreclosures. But that’s for another time.