Citi turns a profit! Is the worst over?

[sevin]

I was surprised to hear that Citi is having its best quarter since 2007. How is that possible and what does it mean?

http://bloomberg.com/apps/news?pid=20601087&sid=a0Ii37swxioo&refer=home

 

[Cali4RonPaul]

It means they borrowed money at 0% and had done a great deal of lending. Of course their numbers would reflect that..

 

[krazy kaju]

Haven't people learned yet that they shouldn't call market bottom?

This will be embarrassing for the two journalists.

 

[JoshLowry]

I'd be making a nice profit this quarter if I got billions from the government too...

 

[pcosmar]

http://money.howstuffworks.com/cooking-books.htm

just my thought when I heard it.

 

[sevin]

I'd be making a nice profit this quarter if I got billions from the government too...

Yeah, that's what I was thinking.

 

[anaconda]

The government took ownership of 36% of Citigroup. I'm assuming that this 36% is a mamouth pile of worthless sh_t. The fact that the market responded favorably to this seems laughable.

 

[jclay2]

This guy isn't lying, but he isn't telling you how much of a poor performer the company itself has been. Yes, citi might be pulling a profit these last two months but that is only after losing 98% of the companies value and being propped up at the cost of the US Taxpayer losing 10's of Billions of dollars. But who knows, maybe our worthless common stock can now buy a big mac at mcd's instead of the lame dollar menu.

Ps: I actually love mcd's and their dollar menu!

The government took ownership of 36% of Citigroup. I'm assuming that this 36% is a mamouth pile of worthless sh_t. The fact that the market responded favorably to this seems laughable.

Thats right. Put 40 Billion dollars in and now have stock worth 3 billion. Talk about return on investment.

 

[anaconda]

This guy isn't lying, but he isn't telling you how much of a poor performer the company itself has been. Yes, citi might be pulling a profit these last two months but that is only after losing 95% of the companies value and being propped up at the cost of the US Taxpayer losing 10's of Billions of dollars. But who knows, maybe our worthless common stock can now buy a big mac at mcd's instead of the lame dollar menu.

Ps: I actually love mcd's and their dollar menu!

I can't wait until they unveil the "hyper-inflation buster" menu.

 

[anaconda]

Thats right. Put 40 Billion dollars in and now have stock worth 3 billion. Talk about return on investment.

Astute observation. This is the right light to look at this under. Although I am curious as to where the 3 billion number is coming from..

Plus I noticed that their "earnings" are "$8.3 billion before taxes and one-time charges". Leaves me wondering what the "one-time" charge is and its magnitude.

 

[ArchPaul]

"Pandit declined to say how large credit losses and other one-time items have been that would at least partially offset profit. "

http://www.syracuse.com/news/index.ssf/2009/03/wall_street_rebounds_on_citigr.html

What profit?!

 

[jclay2]

"Pandit declined to say how large credit losses and other one-time items have been that would at least partially offset profit. "

http://www.syracuse.com/news/index.ssf/2009/03/wall_street_rebounds_on_citigr.html

What profit?!

So are you telling me, Pandit is only claiming an operating profit which is completely obliterated when those mysterious other losses and extraordinary items kick in? What a Joke!

 

[Cowlesy]

This is what is happening.

For the first 2 months of the 1st quarter, Citi group has been booking monthly revenue and expenses from its operating lines of business. These typically operate at a profit. Given the fact Citi can borrow essentially at zero, they're turning a profit.

At the end of the 1st quarter (the end of March), Citi will have to assess the assets like CDO's, CLO's, RMBS, CMBS still sitting on its balance sheet. Given there is no market for these, they will incur further massive writedowns which will obliterate any operating line profits they have.

How could they avoid burying those profits underneath all the shitty assets they have? Why, how about we get rid of the mark-to-market rule for illiquid assets?

Done. Barney Frank is on it.

Anyone who buys Citi on accounting gimmicks is a fool.

 

[ArchPaul]

This is what is happening.

For the first 2 months of the 1st quarter, Citi group has been booking monthly revenue and expenses from its operating lines of business. These typically operate at a profit. Given the fact Citi can borrow essentially at zero, they're turning a profit.

At the end of the 1st quarter (the end of March), Citi will have to assess the assets like CDO's, CLO's, RMBS, CMBS still sitting on its balance sheet. Given there is no market for these, they will incur further massive writedowns which will obliterate any operating line profits they have.

How could they avoid burying those profits underneath all the shitty assets they have? Why, how about we get rid of the mark-to-market rule for illiquid assets?

Done. Barney Frank is on it.

Anyone who buys Citi on accounting gimmicks is a fool.

Like I said, today was the mark-to-market pre-party.

edit: sorry, that was the dow thread.

 

[Emmitt2222]

This "profit" is complete smoke and mirrors. I heard it and it sounded so fake that I did some research myself and here is what I discovered...

“Based on historical revenue and expense rates, Citi's projected earnings before taxes and one-time charges would be about $8.3 billion for the full quarter.”

http://biz.yahoo.com/ap/090310/citigroup_ceo_letter.html

Did you catch the spin? It is quite interesting considering in one sentence there are multiple tricks taking place. First of all, Mr. Pandit stated that the firm was profitable for the first two months, but used a projected number for the entire fourth quarter. This projected number is larger and thusly nicer looking to the public. Because it is a projection, it is also not a set number in reality. Stockholders have no definitive way of proving how they created that projection.

Second, and more disturbing, is the devious exclusion “before taxes and one-time charges”. The effective tax rate for the previous quarter was 44.6%; a sizeable percentage increase added to their loss column. One-time charges include their write-downs, the large bulk of expenses that Citi has incurred during this credit contraction. Effectively, Mr. Pandit merely gave the revenue for the company in the first two months of the year and then extended this rosy number to include all three months of the quarter. Conclusion: The number you heard announced this morning is relatively meaningless – a tool used by the CEO to instill confidence in his company at a time when there is very little.​

The full story will be posted sometime soon on politicallore.com

 

[tremendoustie]

But who knows, maybe our worthless common stock can now buy a big mac at mcd's instead of the lame dollar menu.

Ps: I actually love mcd's and their dollar menu!

 

[ItsTime]

I just bought 25,000 shares




JK

 

[tmosley]

I can't wait until they unveil the "hyper-inflation buster" menu.

Sawdust with a little "alley pig" meat mixed in.

 

[power]

I was surprised to hear that Citi is having its best quarter since 2007. How is that possible and what does it mean?

Citigroup CEO, Vikram Pandit is a Indian-born which reminds me of "Satyam computers" fraud previous month. The 4th largest IT company in India, Satyam's boss inflated profits of $1.5 billion and investors and people believed it is is profitable company for 8 years.

Even the Auditors, PriceWaterHouse Coopers were not able to detect the well-engineered and hidden fraud.

 

[Emmitt2222]

Citigroup CEO, Vikram Pandit is a Indian-born which reminds me of "Satyam computers" fraud previous month. The 4th largest IT company in India, Satyam's boss inflated profits of $1.5 billion and investors and people believed it is is profitable company for 8 years.

Even the Auditors, PriceWaterHouse Coopers were not able to detect the well-engineered and hidden fraud.

Why must people do this?

Read my response or Cowlesy's and you will quickly understand that this is not really a matter of cooking the books. He is just using semantics and good looking numbers to create a false optimism. Could they be cooking the books some? Yes. But use Ockhams razor people. It is far more likely he is merely bending the truth with numbers than creating an entire elaborate scheme to throw people off.