To complete, k2 on #1; k1, k2tog, ssk, k1 on #2; k3 on #3, then with same needle, k2tog from #1-8 sts with 4 on each of two needles. Leaving a 10-inch tail, cut the yarn.
Hold wrong sides together with the needles pointed to the right. Thread the yarn tail into a yarn needle. *Insert the yarn needle knitwise through the first stitch on the front needle and let the stitch drop from the needle.
Insert the yarn needle into the second stitch on the front needle purlwise and pull the yarn through, leaving the stitch on the needle.
Insert the yarn needle into the first stitch on the back needle purlwise and let it drop from the needle. Insert the yarn needle knitwise through the second stitch on the back needle and pull the yarn through, leaving the stitch on the needle. Repeat from * across until all stitches have been joined. Adjust the tension as necessary. Weave in loose ends.
Fold top MC edge in half and sew in place along WS, leaving the hanging loop free.
Embroidery: Separate one ply of CC from a 24-inch strand. Thread into yarn needle and chain stitch. Duplicate stitch: Using MC, duplicate stitch letters onto front.
Pom-poms: Using the pom-pom maker and CC, make 8 pom-poms. Sew them in place about 1 inch apart along top edge.