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What Enron & WorldCom Can Teach Us About Goldman & AIG
Arianna Huffington
Newsweek's latest cover story declares that The Great Recession is over. A Merrill Lynch report concurs, saying, 'The recession is over... We are bullish on global equities.' Goldman Sachs is placing riskier bets on the market than it did before the financial meltdown (and setting aside huge amounts of money to pay its executives). The problem is ...
Smoke Billowing Out of Our Economic Mount Vesuvius
Arianna Huffington
There is currently plenty of alarming smoke pouring out of our economic Vesuvius, but it is being dismissed. Don't worry about economic tremors, we're told, our financial system is back on track, the bailout worked and we'll start our slow but steady climb to recovery. But warning signs are all around us ...
Cramer's 'Mad Money' Recap: Cramer's 'Mad Money' Recap: The Smart Investor
Cramer says investors can do a better job of picking stocks than mutual and index funds. 2010 09 02 19:00
Jumbo Borrowers See Better Rates, Too
Borrowers taking out "jumbo" loans have seen rates drop significantly, but qualifying for bigger loans is still tough. 2010 09 02 18:12
Lobbying on New Finance Rules
2010 09 02 17:28
Why Women Are Fleeing Wall Street
2010 09 02 17:27
Busted: Chest Size In The Office
Does size really matter? When it comes to your bust, it seems to. 2010 09 02 16:45
Ben Bernanke's Labor Day Reading List
2010 09 02 16:18
Citibank Japan Tops Nikkei's Retail Banking Survey
Citibank Japan Ltd. (hereafter Citibank Japan) was ranked number one in the Nikkei's prestigious Retail Banking Survey. Jointly conducted by Nikkei Inc. and Nikkei Research Inc., the sixth annual 2010 09 02 10:25
Hewlett-Packard's $10 Billion Spending Spree
How doling out cash can boost the company's stock price. 2010 09 01 17:21
MSN Money News - C
News about Citigroup Inc
Busted: Chest Size In The Office
Does size really matter? When it comes to your bust, it seems to.
Citibank Cash Back Credit Card Favors Round Numbers
Citibank clarifies new credit card rebate rules.
Only The Macros Matter
Now is the time to be level-headed. Many stocks are trading at or near intrinsic value like MetLife, Peabody Energy and Goldman Sachs.
Citibank Cash Back Credit Card Is No Cash Cow
You've got to wonder on occasion whether banks and brokerages have secret rooms somewhere full of people whose job it is to come up with diabolical ways to hose customers. That thought crossed my mind the other day when I was looking at the statement for my Citibank cash back card.
Yes, I know Washington pols [...]
Despite Rebound from '09 Losses, Bank Profits Still Hampered by Crisis
The good news: banks are profitable. The bad news: but not by much.
These are the Most Underwater States
The sand states are still in trouble. But negative equity is high in some unexpected places.
Beware the Two-Handed Banks
Despite new regulations, banks are finding new ways to squeeze credit card customers.
Spending A Lot On Facebook
Following the money in the social media ad boom.
Citi Sees Cliffs Natural Resources Climbing
Firm bumps up earnings forecast for mining company. CSG Systems, Cree also draw upgrades.
This Week in Credit Card News
Credit card debt falls and other industry news.
How to Visualize the Growing Student Loan Problem
New debt clock shows how much U.S. student loan debts grow per second.
You're Gonna Like The Way Men's Wearhouse Looks At $25
JP Morgan upgrades Men's Wearhouse on optimism that acquistions will bear fruit.
'Quantitative Easing' Is A Toxic Phrase for a Routine Policy
The issue is not that the Fed creates money with open market operation. The issue arises only if it creates too much or too little.
Free Online Alerts Can Help Credit Card Customers
How to make your credit card work for you.
Bond Bubble, Dollar Doom: Embrace The Fear Says Fisher
Bond Bubble Forming:
Author and Wharton Professor Jeremy Siegel says a bubble is forming in the bond market, and that those who continue to rush into bonds are making the same kind of mistake investors made back during the technology bubble of the late 1990s. Siegel tells CNBC that [...]
Too Big To Fail - In Eggs
In a blog about the financial markets, I'd like to take a detour into the huge egg recall underway. Odd as it may seem, what we call derivatives today came in part from a bunch of egg dealers who got together to trade in Chicago. They traded eggs, then they traded futures contracts on eggs, [...]
Much Ado About Alwaleed
Would a recent morning news segment on Cordoba House imam's funding be any more or less relevant if it were revealed that the man behind Kingdom Holding Company - billionaire Prince Alwaleed bin Talal - also holds considerable stakes in some of America's most renowned companies?
How to Win The Credit Card Game
3 ways to make your credit cards work for you.
New Credit Card Rules Now in Effect
How the new laws will affect you.
UBS Sees Bright Side On First Solar
Firm upgrades shares to buy, cites improving growth rates across sector.
Citi Drops Target On Williams-Sonoma, Goldman Drops Hammer On Auctioneer
Goldman Sachs maintains a neutral rating but lowers KAR Auction Services' price target to $15.
The Economy's Delta Blues
It will become clear soon that the Federal Reserve must do more to achieve whatever growth in its portfolio is necessary to keep the money supply growing.
Goldman Sachs A Vampire Squid? Try Cruel Manchurian Tiger With The IQ Of A Shar Pei Dog
A new Chinese book takes aim at a favorite target of the financial crisis.
NYT Sends Buy Signals on Real Estate and Stocks
If you think The New York Times front page is the gold standard for conventional wisdom and lagging economic indicators (and I do), then maybe it is time to think like Warren Buffett and get greedy.
Paul Volcker Talks Financial Reform
Paul Volcker, chairman of President Obama's Economic Recovery Advisory Board, discusses financial reform with Steve Forbes.
Forbes.com: c
The latest Forbes.com news on the ticker c.
UPDATE - Metro Bank ahead of targets on new accounts
UPDATE - Merrill Lynch's Asia wealth mgmt chief to retire-memo
JPMorgan Shuts Prop Trading Unit as Banks Maneuver Around the Volcker Rule
AIG Unit Said to Submit Preliminary IPO Application
Banks’ Pay Practices Still Need Improvement, IIF Survey Finds
[$$] AIG Loads Up for Unit's IPO
Most active New York Stock Exchange-traded stocks
[AP] - A look at New York Stock Exchange 10 most-active stocks at the close of trading: Bank of America Corp. rose .5 percent to $13.28 with 126,530,500 shares traded.
Will August's Worst Sector Rebound In The Fall?
Lobbying Picks Up as Finance Rules Are Written
Why Women Are Fleeing Wall Street
Ben Bernanke's Labor Day Reading List
Financial Stocks: Financials rise after jobs, housing data
[at MarketWatch] - The U.S. financial sector edges higher Thursday as investors react to a flurry of economic data, including a modest drop in weekly jobless claims and a rise in pending home sales.
Busted: Chest Size In The Office
If Apple's headed to $350 by year end, what's your stock gonna do?
[$$] Garuda Taps UBS, Citigroup as IPO Underwriters
Why Low-Rated Mutual Funds Can Still Be a Good Investment
[CNBC] - While investors favor mutual funds with four-or five-star ratings, there may be hidden gems in some of the lower-rated funds. "Just because a fund's been underperforming doesn't mean it's not worth owning,'' says one pro.
1 Stock You Should Avoid Right Now
Bair promises war on 'too big to fail'
[at Fortune] - Did this summer's regulatory overhaul really kill too big to fail? Count the chairman of the Financial Crisis Inquiry Commission, Phil Angelides, as a skeptic. Angelides asked Federal Deposit Insurance Corp.
No Pop For PPL On Citi Upgrade
Citibank Cash Back Credit Card Favors Round Numbers
Yahoo! Finance: C News
Latest Financial News for Citigroup, Inc. Common Stock
Judges Sound Off on Bank Settlements
Lately, some judges have departed from quietly rubber-stamping government settlements with troubled banks.
Banks Get Stuck With the Bill as Mortgage Loans Fail
Big banks have already taken losses of nearly $10 billion on loans gone bad, though they were far from the only institutions at fault.
Judge Not Ready to Decide on Citigroup-S.E.C. Settlement
Approval from a federal judge is needed for a $75 million settlement on claims that Citigroup misled investors on its subprime holdings.
Company Innovators Ask: What Works?
Works in progress at Weyerhaeuser, Best Buy and Citigroup show how new products and services can address wider market needs.
Rubin to Join Centerview, A Young Firm
Robert E Rubin, more than one year after leaving Citigroup amid criticism over his senior advisory role, joins boutique investment bank Centerview Partners; appointment is expected to bring higher profile to firm as Rubin slips into role of advising clients; career highlights; photos
Regulators Unearth Merrill’s Dodging of Risk Disclosure
Merrill Lynch kept quiet about the extent of its exposure to risky subprime investments. Now regulators are studying that decision and others that helped lead to the financial crisis in 2008.
Wall St. Faces Prospect of Separating Trading Units
Investment banks like Goldman Sachs are considering how to comply with new rules from Washington governing their trading and investments.
Who Pays Citi’s Fines? Its Shareholders
The S.E.C. settlement with Citigroup looks like a victory for the good guys, but the bank’s shareholders are really the ones paying the $75 million fine.
What Happened to JPMorgan’s Friendship With Cablevision?
A case involving JPMorgan is another example of the drumbeat of disconcerting revelations about banks.
Citigroup Pays $75 Million to Settle Subprime Claims
Besides the bank, two executives were singled out for not disclosing information about mortgage investments.
Federal Report Faults Banks on Huge Bonuses
Report from Kenneth R Feinberg, Obama administration's executive compensation monitor, will name 17 financial companies that made questionable payouts totaling $1.58 billion immediately after accepting billions of dollars of taxpayer aid; group includes giants like Goldman Sachs, JPMorgan Chase and American International Group as well as smaller lenders; report points to companies that paid huge amounts or used haphazard criteria for awarding bonuses; singles out Citigroup as biggest offender; ...
Poor Trading Results Hurt Citigroup and Bank of America
Fears of a European debt crisis and a double-dip recession here hurt Citigroup’s investment bank in the quarter.
Banks Already Learning to Live With New Rules
With the final approval of financial regulatory reform, banks have moved quickly to turn the rules to their advantage by adding new fees and revamping their derivatives operations.
Citigroup Loses Bid to Dismiss Bondholders’ Suit
The bondholders, including pension funds and an insurer, are pursuing allegations that the bank was misleading in its disclosure of liabilities.
Agricultural Bank of China Raises $19 Billion in I.P.O.
The Agricultural Bank of China offering may ultimately raise as much as $22 billion, which would make it the largest in history.
NYT > Citigroup Inc.
Citigroup Inc. was formed in 1998 when the company's architect and former chief, Sanford I. Weill, merged the insurance giant Travelers Group and Citicorp, then the nation's largest bank. Mr. Weill's vision was of a financial superpower dominating global markets. What followed instead were years of lackluster results, followed by a near-death experience in 2008 as its aggressive real estate bets produced tens of billions of losses. Citigroup stayed afloat only with $45 billion in federal funds. Lagging behind the rest of Wall Street, it returned to profitability in the first quarter of 2010, as its chief executive, Vikram S. Pandit, said he would move to break up the company, leaving behind a smaller but more prudent business.
Citigroup traces its corporate roots back to 1812, when it was chartered as the City Bank of New York. In the 1970s and 80s, Citibank was an aggressive leader in many aspects of banking, some of which worked (like ATM's) and some of which didn't (like big loans to Latin America). The merger with Mr. Weill's Traveler's group marked another breaking of barriers: Mr. Weill had lobbied for years for the repeal of Glass-Steagal, the Depression-era law that had separated commercial and investment banking.
The deal brought traditional banking, insurance and Wall Street businesses, like stock underwriting, under one roof. But for the first decade of its life, the company came under repeated fire from shareholders for lackluster results. Then came the housing bust. Citigroup had been an aggressive player in the securitized mortgage market, and those chickens came home to roost in tens of billions of losses. After a change in chief executives and two federal bailouts, Citigroup announced on Jan. 16, 2009, that it would split, for management purposes, into two entities, Citicorp and Citi Holdings. A third bailout in February 2009 brought the federal government's investment to $45 billion, making taxpayers the bank's largest single shareholder. Citigroup was considered to be in the worst shape among the major banks.
In December 2009, Citigroup announced a broad program that would replace the $20 billion of remaining bailout aid with money from private investors, facilitate the sale of the government's $25 billion in bank stock and allow it to wean itself off other forms of federal assistance. But Citigroup badly misread the financial markets. While the company managed to raise $20.5 billion in the stock market and forged ahead with the repayment, the sale went so poorly that anxious Treasury officials reversed course and delayed plans to start unwinding the government's stake in the company immediately.
In March 2010, Mr. Pandit told a congressional oversight panel that he was moving to break up the bank, selling 40 percent of the company, and reining in excessive risk-taking. The month ended with the Treasury saying that it planned to sell its 7.7 billion common shares in Citigroup over the course of 2010. It will gradually reduce its 27 percent ownership position through a series of stock sales to investors.
In April, still streamlining, Citigroup agreed to sell a $4.2 billion hedge fund unit, including its fund of funds business, to SkyBridge Capital. The unit to be sold was part of Citi Holdings, a collection of businesses earmarked for sale.
Later in April, after nearly two years of being drenched in red ink, Citigroup provided strong signs that it was beginning to recover as it reported a $4.4 billion profit in the first quarter of 2010. The earnings, which handily beat analyst expectations, were the result of the resurgence in the bond market and improvements in the economy, particularly overseas. Both played to Citigroup’s strengths as a major player in fixed income and emerging markets.
Creating Citigroup
Citigroup's original leadership arrangement involved an awkward relationship in which Mr. Weill and Citicorp's head, John Reed, shared the title of o-chairmen. Mr. Weill eventually pushed Mr. Reed out and installed his longtime lawyer, Charles O. Prince, as his successor.
Under Mr. Prince, Citigroup charged aggressively into the trading of mortgage-backed securities that were the hot product on Wall Street at the time. As late as the summer of 2007, as evidence mounted of a collapse in the housing market, Mr. Prince declared that the bank was "still dancing."
Not much later, the music ended, and Mr. Prince was out in November of that year as the bank posted a $5.9 billion loss.
The Financial Crisis
The loss turned out to be the first of many. Citigroup losses for 2008 totaled $27.7 billion, among the largest in corporate history.
Citigroup's first cash infusion from the government came in October 2008 in a $25 billion capital injection from the Troubled Asset Relief Program, or TARP. The bank's breakup plan came after a stern regulatory warning it received in late November 2008, when its rapidly deteriorating share price prompted the government to give it a second cash infusion, of $20 billion. Federal regulators also leaned on Citigroup to shake up its board and on Jan. 21, Richard D. Parsons, the former Time Warner chairman, was named its new chairman.
A new strategy, put into place by its chief executive, Vikram S. Pandit, focused its executives' attention on its stronger remaining businesses while winding down its money-losing operations.
Restructuring and a Greater Government Stake
By segmenting Citigroup into Citicorp and Citi Holdings, run by separate managers, Mr. Pandit seemed to be setting the stage for a spinoff of Citigroup's stronger operations, or an eventual merger. Meanwhile, reporting the two sets of businesses separately should burnish its quarterly results by making it easier for investors to focus on its healthier operations.
On Feb. 27, 2009, Citigroup and Treasury officials reached an agreement that vastly increased government ownership of Citigroup, to 36 percent. Under the deal, the Treasury Department agreed to convert up to $25 billion of its preferred stock investment in Citigroup into common stock, giving taxpayers more risk, but more potential for profit if the company recovers. The government will not put in any additional money for now, but some analysts believe Citigroup may require more down the road.
Under pressure from federal regulators, the bank reorganized its management team repeatedly, naming three new chief financial officers in four months and swapping out or pushing aside other high-level executives.
On Jan. 19, 2010, the bank announced that a loss for 2009 of about $1.6 billion. Citigroup reported a $7.6 billion loss for the fourth quarter after a $10.1 billion accounting charge tied to the repayment of its bailout money erased any chance of a profit.
The weak sale in December 2009 represented a significant setback for Mr. Pandit and his efforts to free the bank from government control. It also underscored the lingering worries over Citigroup's financial health, as well as concerns that federal officials may have let Citigroup exit the bailout program too soon.
Nonetheless, Citigroup’s first-quarter results for 2010 were surprisingly strong. The bank’s $4.4 billion profit, or 15 cents a diluted share, and net revenue was up slightly, to $25.4 billion from $24.5 billion in the quarter in 2009.
Losses in Citigroup’s domestic mortgages and credit units continued to mount — albeit at a slower pace. Citigroup Holding, which contains the bulk of most-troubled mortgage and credit card assets along with businesses marked for sale, lost $876 million. Citicorp, its core businesses, gained $5.2 billion.
In June 2010, Citigroup announced that it was closing 330 branches of its consumer finance business as part of an overhaul aimed at finding a buyer for the unit. The unit, called CitiFinancial, is a part of Citi Holdings. CitiFinancial was to be split into two parts; one offering personal, home equity and refinancing loans, and the other handling loan modifications and restructuring.
Wall Street History and Profits for the Treasury
In his congressional testimony in March 2010, Mr. Pandit sought to convince committee members that Citigroup had broken with its troubled past, saying no financial institution should be too big to fail. He advocated federal supervision and called for broader powers to allow for the orderly unwinding of large financial companies that fail.
With the Treasury's announcement on March 29 that it will sell 7.7 billion shares in 2010, the Citigroup stock sale will be among the largest in Wall Street's history. It is a major step in the bank's delicate effort to sever its ties with Washington.
The government still holds other investments in Citi, however. Both the Treasury and the Federal Deposit Insurance Corporation own trust preferred shares and warrants in the bank stemming from the bailouts. Neither agency has indicated when it will sell those securities.
The government profit on the sales of its shares would be on top of $8.1 billion in interest payments and other fees it has already collected, making Citigroup one of the government's most lucrative investments of the Troubled Asset Relief Program.
Financial Stocks Mostly Higher (Citigroup Inc., Bank of Ireland, Wells Fargo & Company, BB&T Corporation)
Emailwire - 21 minutes ago
Bank of America
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Citigroup, Inc (NYSE: C) Cuts Price Target on Constellation Energy (NYSE: CEG)
American Banking News - 12 hours ago
Citigroup Inc Stock Continues To Rise As Economic Outlook Brightens
Times of the Internet - 16 hours ago
Citigroup (NYSE:C) Content Deal
Stock Briefings - 19 hours ago
Early Market News: Citigroup Inc. (NYSE:C), Chevron Corp. (NYSE:CVX), McDonald's Corp. (NYSE:MCD) - eMoneyDaily
Shares of Citigroup Inc. (NYSE:C) Stock Exits Consolidation
newsFuzion - Sep 1, 2010
CIBC Completes Acquisition Of $2 Billion Canadian MasterCard Portfolio From Citigroup Inc.
Reuters Key Development - Sep 1, 2010
Citigroup, Inc. Stock Rallies Sharply As Ireland Chokes On Debt
Times of the Internet - Sep 1, 2010
Story Stocks: Citigroup (NYSE:C), Apple (NASDAQ:AAPL), Joy Global (NASDAQ:JOYG), H.J. Heinz (NYSE:HNZ)
Jutia Group - Sep 1, 2010
Citigroup, Inc (NYSE: C) Reiterates “Buy” Rating on Kellog Corp (NYSE: K)
American Banking News - Sep 1, 2010
News for Citigroup Inc. - Google Finance
News for Citigroup Inc. - Google Finance