Citigroup Inc. shares rose again for the second straight day after the government announced a plan to provide the beaten down bank with hundreds of billions of dollars in additional support.  Shares had previously surged 58 percent Monday, a day after the government deal was announced.

Sandler, O'Neill & Partners LP analyst Jeff Harte upgraded Citi to a "Buy" from "Hold" because of the additional support. Harte, though, cut his fourth-quarter and 2009 forecasts because of a revised expectations for losses.  Harte has been skeptical of the banking industry for over a year.  Early this year, Harte said on CNBC "I don't think we're headed for a depression..[but] I think theres a whole other leg of credit problems to come."  He argued passionately with a bullish analyst that the sector was headed for a fall: "things are gonna get worse, not better."

Today, Harte looks like a man who provided good analysis.  His switching to "Buy" on Citigroup is a good sign for a bank that has lost an incredible amount of market value.

Late Sunday, the Treasury Department, Federal Reserve and Federal Deposit Insurance Corp., announced a plan to help Citi avoid what happened to the other financial firms during the ongoing credit crisis.

"Government actions reinforce our belief that the government has drawn a proverbial line in the sand around Citi's survival," Harte wrote in a research note. Harte said the deal with the government is a positive for shareholders as well.

Citigroup has been among the hardest hit banks by the ongoing credit crisis and posted four consecutive quarterly losses, including a $2.8 billion loss during the third quarter. The bank's share price tumbled last week amid fears about its near-term solvency.

Harte now expects Citi to post a loss of 62 cents per share during the fourth quarter, compared with a previous estimate for earnings of 6 cents per share. He cut his 2009 earnings estimate to $1 per share from $1.70 per share.

The cut in estimates is based on "significantly increased credit reserve builds and asset market-to-market losses," Harte wrote in the note. The 2009 estimate also includes rising credit costs and the preferred dividend payments to the government, he added.

Analysts polled by Thomson Reuters, on average, forecast a loss of 42 cents per share during the fourth quarter and earnings of 44 cents per share for 2009.