Citigroup: Essentially ZERO Actual Profit
The Market Ticker ® - Commentary on The Capital Markets
Posted 2010-10-18 09:57
by Karl Denninger
in Earnings
Ignore this thread
Citigroup: Essentially ZERO Actual Profit
 

Not what's reported, of course.  But the truth.

Oct. 18 (Bloomberg) -- Citigroup Inc., the bank 12 percent- owned by U.S. taxpayers, said profit surged, beating analysts’ estimates as the company reduced loan-loss reserves by $1.99 billion.

Third-quarter net income was $2.17 billion, or 7 cents a share, compared with profit of $101 million, or a loss of 27 cents after preferred dividends, in the same period a year earlier, the New York-based bank said today.

Got that?  The net income was $2.17 billion, but the reserves were reduced by $1.99 billion.  That is, virtually all of the alleged "profit" was not earned cash, it was reduced provisioning.

If you look at cash profit, it was $180 million - or less than 10% of the total reported.

“We have put in place all the elements for continued profitability,” Pandit said in the statement.

That's a blatant lie.  Out of revenue of more than $20 billion you couldn't even earn a 1% net operating profit margin on a cash basis?

But today, nobody is held to account for making statements that are on their face complete crap, and this is particularly true when we talk about bankers.

Disclosure: Pandit is a douche.

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User Info Citigroup: Essentially ZERO Actual Profit in forum [Market-Ticker]
Throxxofvron
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Truly astounding levels of hubris and disinformation...

How many Hundreds of Millions in repurchase agreements are being demanded by FHLBanks and the GSEs?

The Bastards are gonna try to bonus themselves more than the company actually made at the end of the year.

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DIONYSUS: " Thou hast no knowledge of the life thou art leading; thy very existence is now a mystery to thee. " -from 'The Bacchantes' By Euripides “During times of universal deceit, telling the truth becomes a revolutionary act.” -George Orwell
Lizardqueen
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This is a serious topic but I couldn't help but chuckle at your great disclosure :).

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Clumsygardener
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I love how noble and selfless Pandit (the douche) is purported to be because he accepts only one dollar in compensation.

That's all you're worth, ya jackwagon.

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For the love of money is the root of all evil...
Everton86!!
Posts: 34
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market strong this POMO morning...dont own Citibank but i'd sell if i did.

Wearedoomed
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Quote:
Disclosure: Pandit is a douche.
Inline

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Lies, all of it.
Mari
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If they have reserves, there won't be as much incentive for the government to bail them out and they will have wasted all that money they set aside for losses to actually cover their losses rather than pretend they made a profit so they can get their big bonus bucks.

Loved, loved, LOVED the disclosure!

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Curbyourrisk
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Disclosure......I agree with your disclosure.

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Patentleathershoes
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Nice disclosure!!

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Randy123
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Mr. Vikram is doing a bang up job.

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Docj
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Headline from the AP, via Yahoo: Stocks climb after Citigroup tops forecasts

Obviously the fraud is going to continue a little longer.

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5755hsa
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we are well capitalized.....famous last words. Citi= Has No Clothes

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Striker754
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Just like Alcoa. Why would you want to own this trash that can only squeeze a 1%-2% margin?
Leicestersq
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UK
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Once you are in the position of having cash but more liabilities than assets what do you do?

You are really caught. Either you fess up, which means you have to close down the bank, and face howls of protest from investors and bondholders, or you carry on, hoping for a miracle, whilst breaking the law, and presumably making things worse for everyone. With no Prompt Corrective Action, the misery is prolonged.

Not sure how I would fare in that situation. I think I would be begging the authorities to close me down, just so that it appeared the closure was being forced on me. I bet that is what a lot of the people at the top of the banks want, but due to their own efforts, they have emaciated the regulators that should be carrying out this face saving role for the bust banks.

Hoisted by their own petards.
Otiswild
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BUYBUYBUY!
Inline
Donethat
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Citibank, which should be making millions on their student loans at the Congressionally mandated fixed 8 or 8.5 percent while the FRB will back them at any time at 0.25? Oh wait, they are selling that business. Wonder why.

Writing off bad loans at 2 Billion a quarter, now that may take awhile.
Ruffcut
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Ha Ha! They created the "tip of the iceberg" rule, where you only show 10% of your exposure, losses or fudgery.

Waiting for cumblow to come on and say; "Come on people, they told some truths here, yes, they told some truths. Throw them a bone."

****, "throw them a bone"? How could I throw a bone when it is stuck up me bum.

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Ktrosper
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Is there a line item in their Quarterly report that shows how much they LOOTED?

Because that number would be seriously huge and, of course, drive their stock higher and higher!!!!

Party on!

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Medicdan
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Quote:
Disclosure: Pandit is a douche.

smiley

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Eaglewwit
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This ought to fall under SARBOX, they are paying bonuses out of loan loss reserves. They don't even have the cash flow to justify paying bonuses. GMAFB.
Blackswan
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This is what the asshats are saying on the Radio.. heard this while I was out driving picking up lunch - market update.. stocks higher today partly due to Citibank earnings and lower losses in write offs of bad debt.. worse appears to be over and things are improving.





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Blackswan
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Sarbox is a joke just look who came up with it.


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Muscleknight
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I bet all the major banks "adjust" the loan loss provision to "beat" estimates.

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Bshj
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Perhaps a silly question but......don't they need MORE loan-loss provisions now, even more than in prior months or quarters?
End_the_bubbles
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It's astounding to see this heaping pile of dung trading up 6%. This is a big fat ZERO! Reducing loan loss provisioning now is insane when the worst is yet to come.

EDIT:

I posted something last month about how they'd scam #'s, although this is a bit different. I think they may have found a way to transfer uncollected (and noncollectable) debts to a SIV without showing the loss. There is something wrong with this whole situation (lowering loan loss provisions) as there is an epic pipeline of defaults coming.

http://market-ticker.org/akcs-www?single....

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