Citigroup
Sachs Appeal
Should Tim Geithner's Wall Street consigliere make us queasy?
What Hath The Stress Tests Wrought?
The issue of the day is obviously CIT. It's hard to sort out the real news from clever PR/planted stories in this situation, but it looks like the FDIC is coming out strongly against being involved in a rescue package. Given Sheila Bair's successful political positioning and strong popular appeal, it's hard to see how--once dug in--the FDIC can be moved. The lobbying frenzy has concentrated on CIT's role in financing small and medium-sized business; "the recession will be deeper if CIT fails" is the refrain. This is a weak argument--it would be straightforward to refinance this part of CIT's b
The Sudden Utility Of Lurid Bank Revelations
The Wall Street Journal has a noble if not quite jaw-dropping piece today on the personal use of corporate jets by executives (and former executives) at bailed-out banks. The gist: A lot of execs continued to indulge in this perk long after their companies went on the government dole. To wit: At Citigroup, two days after the bank canceled the jet order Mr. Obama criticized, former Chief Executive Sanford Weill boarded a Citigroup-owned plane for a flight to a small airport at Saranac Lake in New York state's woodsy Adirondack region.
Annals Of Bank Self-delusion, Citigroup Edition
From the Journal's piece about tension between Citi and the FDIC, which wants to can CEO Vikram Pandit: The discord between Citigroup and the FDIC dates to last fall. In September, Citigroup agreed to buy faltering Wachovia Corp. in a government-arranged marriage. Days later, however, Wells Fargo & Co. swept in with a higher offer for Wachovia. Citigroup officials felt blindsided and faulted Ms. Bair [the FDIC chairman] for endorsing the Wells Fargo bid over their own. On a 2 a.m. conference call at that time, the usually mild-mannered Mr.
A Unified Theory Of The Stress-test Leaks
Okay, so thanks to a final, heroic burst of leaks, we have a pretty good idea of who stands where, stress-test wise: Bank of America, Wells Fargo, and GMAC all need $10-billion-plus increases in common equity, which is just ordinary stock ($34 billion in BofA's case). Citigroup needs another $5 billion--this on top of up to $45 billion in bailout money it's already converting from preferred shares to equity.
Wall Street Civil War
THERE'S A TENDENCY, in the endless discussions about the economic crisis, to think of the entire financial industry as a single, ultra-powerful actor. Big commercial banks, nimble hedge funds, even the odd insurance company all get lumped together under the heading “Wall Street,” with its sinister, Death-Star connotations.
Citigroup And Boa Will Throw A Monkey Wrench In The Stimulus
Noam Scheiber is right about the Citigroup numbers, and investors have seen it right from the start. Puffed up as a big quarterly gain, the report resulted in a sharp down on the Dow, S&P and the NASDAQ. Then came the Bank of America earnings disclosures, even bigger than at Citigroup. And the stock indices fell further. At 2 p.m. as I write, each of the markers is heading south, down about 4%, not a small decline.Investors can now read much-hyped returns for the losses they disguise. The skepticism over accounting hi-jinx is by now endemic.
Dodgy Numbers At--shocker!--citigroup
You don't have to read very far into the coverage of the recent bank earnings announcements to see that there's a lot of dodginess involved. First Goldman reported a $1.8 billion profit, which was great until we learned that they conveniently left December out of their quarterly numbers--December being the date of some enormous losses. Now, Citigroup is touting its $1.6 billion profit--except that, once you read a little further, you notice that what drove it was a $2.7 billion one-off gain that's entirely an artifact of accounting alchemy.
I've been using a Citibank credit card since I graduated from high school (something that becomes obvious if you glance at the card, which features my senior prom photo--they don't ask for a new picture when they issue me a new card). In recent years, I've noticed that Citi has become extremely vigilant about potential theft. For example, last year, they noticed that some London-based outfit had charged my card exactly one cent. They promptly closed my account and issued me a new one, explaining that fraudsters sometimes do this to see if anyone's minding the store.
