Pay no attention to Too-Big-To-Fail banks like Citigroup, which reported a loss of $7.6 billion in the fourth quarter.

Citigroup, the U.S. bank that is 27 percent owned by the Treasury Department, ended a three- quarter profit streak with a $7.6 billion loss on costs to exit the government’s bailout program.

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Chief Executive Officer Vikram Pandit had to book an $8 billion pretax charge when he repaid $20 billion of bailout funds in December to avoid being left behind by rival banks that exited the Troubled Asset Relief Program. Taxpayers still own 7.7 billion Citigroup shares, and Pandit failed to restore the bank to profitability in his second full year in the top job.

In response to losses at Citi reported today, and JPMorgan Chase’s report last week that it lost over $500 billion on mortgages and credit cards, the stock market, not surprisingly, is soaring today.

Forward looking investors also seem to be responding to Citi’s report with optimism, as the stock is up 1% in trading so far today.

Yahoo Finance provides readers some insight as to why we are seeing gains in the markets:

Investors moved back into stocks on hopes that a special election in Massachusetts will take away power from Senate Democrats and make it harder for President Barack Obama to make changes to health care.

The vote Tuesday to fill the seat of late Sen. Edward M. Kennedy could shift power in the Senate if Republican Scott Brown wins. That would give Republicans the 41 votes necessary to filibuster Democratic proposals, including the health care bill.

The prospect of a logjam in Washington over health care eased concerns that profits at companies like insurers and drug makers would suffer. Rising health stocks pulled the broader market higher.

Meanwhile, Kraft Foods Inc.’s agreement to acquire Cadbury PLC for $18.9 billion boosted hopes that corporate dealmaking will continue to rebound. Investors see buyouts as a sign of confidence in the economy.

If you haven’t yet sold all your gold and silver assets and moved everything you have into the stock market, you might consider the economic assessment of the recent Barron’s Roundtable, which includes economists and experts from around the world:

The emerging consensus is that everything is just going to be fine and that we should expect nothing more than a second-half economic slowdown, and that if there is a sharper turndown the monetary and fiscal spigots will be turned on even harder. The market is seen no worse than fair-value.

Tyler Durden at Zerohedge asks “with everyone bullish, who is selling?”

Good question.