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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 ...

Examiner sees accounting gimmicks in Lehman demise
Lehman Brothers Holdings Inc used accounting gimmicks and had been insolvent for weeks before it filed for bankruptcy in September 2008, but there was not extensive wrongdoing, a court-appointed examiner has found. 2010 03 11 22:11

The Lehman Post-Mortem
A bankruptcy examiner says Lehman used dodgy accounting tactics to reduce the firm's reported debt and "reverse engineer" its financial results. 2010 03 11 20:39

'Fast Money' Recap: S&P Jitters
The trading panel discussed the surge in the S&P to a new high. 2010 03 11 19:54

Cramer's 'Mad Money' Recap: Tech Has Come a Long Way (Final)
Cramer says today's tech rally is far different from the one 10 years ago that imploded. 2010 03 11 19:24

Bank reform talks fail, Dodd to go solo
Chances of a broad overhaul of U.S. financial regulation dimmed on Thursday after bipartisan Senate talks collapsed, jeopardizing a top Obama administration priority and boosting bank share prices. 2010 03 11 17:51

Zacks Analyst Blog Highlights: Bank of America Corporation, Citigroup Inc., Washington Federal, Texas Capital Bancshares and Signature Bank
Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. 2010 03 11 17:05

Citigroup sees return to sustained profitability
Citigroup Inc Chief Executive Vikram Pandit told investors on Thursday the bank is on track to return to sustained profitability and losses from some of its worst assets should be manageable if the economy does not deteriorate. 2010 03 11 16:37

Social Compact Launches Exciting New Online Tool in Washington, DC Through Support from the Citi Foundation
Social Compact announced today the launch of its Washington, DC-based ‘CityDNA,’ a new easy-to-use web-based system that will serve as a one-stop-shop for visualizing and analyzing local market data. 2010 03 11 00:01

MSN Money News - C
News about Citigroup Inc

 

The Lehman Post-Mortem
A bankruptcy examiner says Lehman used dodgy accounting tactics to reduce the firm's reported debt and "reverse engineer" its financial results.

Intelligent Billionaires
Steve Forbes sat down with seven of the people on Forbes' Billionaires list. Here are some lessons for success.

Citi's Pandit Rescues Street From Loss
Citigroup CEO's bullish comments spark late rally and hand Wall Street third consecutive gain.

Slim's America Movil Beats Rivals In Market
While share price has dropped in the telecom industry, billion Carlos Slim's companies have held up well.

Goldman Ups Unum
Firm views insurer as a solid growth play in its sector, suspects buybacks.

Bank of America's New Overdraft Policy: What It Means To You
Consumers should be on the lookout for new fees.

Gains Build On Rally In Financials, Tech
Equities in flux Wednesday, even as AIG, Citi and the Nasdaq roar higher.

How The End Of Overdraft Fees Could Wind Up Costing Cardholders
Bank Of America's policy reversal on overdraft fees doesn't signal a halt on revenue-generating tricks

AIG Squeezed Higher
Short-covering could be driving the insurer's rally, but at least credit recent asset sales with an assist.

Pranking Goldman's Lucas Van Praag
The sharp-tongued spokesman is the subject of a blistering Twitter parody.

Tuesday Briefing: Bulls, Bears, and Kroger
A slow earnings week on Wall Street continues.

Big Hedge Funds Heart New York
Billion-dollar hedge funds have floundered in London, but they're hanging on in the Big Apple.

Spending Is Back, Kind Of
Consumer debt increased in January, but households are still leery of credit cards.

Capital One Gets Cut
Goldman downgrades bank's shares, citing consumer credit worries.

Citigroup Faces Consumers On The Web
Citi's execs try to appear more accessible, transparent.

Street Cautious After Housing Report
January pending home sales unexpectedly drop 7.6%.

Big Bank Backlash
Nine percent of U.S. adults have moved their business in protest.

The 100 Best Corporate Citizens
These businesses are setting the bar for corporate social responsibility, according to a new ranking.

Airport Security: Bin Laden's Victory
We have paid hundreds of billions of dollars in lost time and productivity.

Finding Buried Bodies In Bank Losses
Fuzzy accounting and government programs obscure a clear picture of lenders' health.

The Sovereigns And The Serfs
Pimco's Bill Gross says government finances are looking more like those of bailed-out companies.

Get Briefed: Robert Diamond Jr.
Barclays PLC President Robert Diamond Jr. discusses proprietary trading and the impact of bank failures.

Buffett Says CEOs and Directors Of Failed Banks Have Gone Unscathed
Owners of failed banks took a heavy hit; so should managers, he says.

Leveraging Industrial Recovery
It's becoming increasingly clear that this rebound is the real thing. Here's how I'm playing it.

Bernanke Cures Market Declines
Continued low rates from the Federal Reserve cheer investors. Dollar sinks, commodities climb.

Forbes.com: c
The latest Forbes.com news on the ticker c.

 

Examiner sees accounting gimmicks in Lehman demise (Reuters)
Lehman Brothers Holdings Inc used accounting gimmicks and had been insolvent for weeks before it filed for bankruptcy in September 2008, but there was not extensive wrongdoing, a court-appointed examiner has found.

UPDATE - Examiner sees accounting gimmicks in Lehman demise (at Reuters)

[$$] Citi Says It Is Poised for Sustained Profits (at The Wall Street Journal Online)

Lehman report faults executives (at FT.com)
A one-year probe into the collapse of Lehman Brothers found "credible evidence" that top executives, including the former chief Dick Fuld, approved misleading financial statements and used an "accounting gimmick" to flatter results.

Summary Box: S&P 500 index closes at 17-month high (AP)
JUST BY A HAIR: The Standard & Poor's 500 index inched just above its recent peak in January to set a new 17-month high. The achievement is a welcome sign for traders who were concerned the market would stall around the January levels.

[$$] Citi Rises 5.6% on Pandit Comments (at The Wall Street Journal Online)

The Lehman Post-Mortem (at Forbes.com)

SEC head urges Congress to act on derivatives (AP)
The government's top securities regulator called Thursday for Congress to impose new oversight on financial derivatives, warning that allowing risky instruments like credit default swaps to continue unfettered could bring further economic damage.

Discover Slashes Q1 View; Shares Off 4% (at Barrons.com)

Citi CEO: Local Consumer Lending losses contained (at MarketWatch)
If Pandit is right, Citi may be more free to pursue overseas growth.

GMAC CEO will receive no cash salary for 2010 (AP)
The CEO of bailed-out auto finance giant GMAC Inc. will receive no cash salary for 2010 and will be compensated in restricted stock, under a deal approved by Obama administration pay czar Kenneth Feinberg, according to people familiar with the matter.

Citigroup's Chief Is Optimistic on Profit Growth (at The New York Times)

Fuld Rebuts Lehman Report (at Barrons.com)

Japanese shares climb early, with autos strong (at MarketWatch)

Here's a Statement from Dick Fuld's Lawyer on Examiner Report (at The Wall Street Journal Online)

Citigroup Gains Buoy Markets; Dow Up 44.51 (at The Wall Street Journal Online)

[video] Personal Finance Minute: Debit & Credit [1.9 min] (at MarketWatch)
Consumers soon can say goodbye to steep overdraft-protection fees on debit cards, but banks are busy coming up with new sources of revenue, particularly on credit cards. Personal Finance Editor Andrea Coombes shows you ways to keep costs under control.

Lehman: "Colorable Claims" against Dick Fuld (at Barrons.com)

Third Point Mourns Loss of Adam Sackett, Co-head of Trading (at The Wall Street Journal Online)

'Hail Mary' to Warren Buffett: Untold Details of Lehman's Fall (at The Wall Street Journal Online)

Yahoo! Finance: C News
Latest Financial News for Citigroup, Inc. Common Stock

 

The Swaps That Swallowed Your Town
Across the country, cities, towns and school districts are dealing with the mess wrought by financial derivatives.

Panelists Question Citigroup’s ‘Government Guarantee’
Members of a government committee questioned whether the support that Citigroup received could pose future risks for the financial system.

Battle of the Bands: Citigroup Is Up Next
A private equity firm, Terra Firma, and its lender, Citigroup, are fighting in court over possession of the music company EMI.

U.S. Report Details Money Laundering
An investigation has shed new light on how major banks unwittingly shifted hundreds of millions of dollars on behalf of politicians, their relatives and associates.

Ailing Banks Favor Salaries Over Shareholders
A few struggling banks in the postbailout world are by some measures the industry’s most generous employers.

Pandit Is Running Out of Time to Clean Up Citigroup
After billions of dollars in losses at Citigroup, Vikram S. Pandit must make a profit in 2010, or risk losing his job as chief executive.

Citigroup Bonus May Trump Goldman’s
With Citigroup shares trading well below book value, a stock bonus could be a growth investment.

Citigroup Replaces Head of Consumer Banking
The executive, Teresa A. Dial, stepped down after a controversial 18-month tenure, during which she struggled to turn around the division.

Banks Prepare for Big Bonuses, and Public Wrath
The bank bonus season begins in earnest next week, and it looks as if it will be one of the largest and most controversial blowouts the industry has ever seen.

The Other Plot to Wreck America
The financial crash precipitated by the failure of Lehman Brothers was the banking industry’s 9/11. Without reform, another massive attack on our economic security is guaranteed.

What’s a Bailed-Out Banker Really Worth?
Kenneth Feinberg, Washington’s pay czar, has grappled more than anyone with the question of how much to pay executives at failed companies.

Citi’s Creator, Alone With His Regrets
Sandy Weill, the former head of Citigroup, says the bank didn’t want his help to recover. The rejection stung.

Repaying U.S. and Reaping Bounty in Fees
To repay taxpayers, Wall Street banks raised billions of dollars in new capital, and they generated millions of dollars in fees doing so.

Government Reconsiders Quick Sale of Citigroup Stake
Two days after Citigroup moved to untangle itself from Washington, the Treasury backed away from plans to immediately sell a portion of its stake in the bank, according to a person briefed on the situation.

A Tax Break for Citigroup With Payback of Bailout
The Internal Revenue Service has ruled that the bank can keep a $38 billion benefit that it would ordinarily have had to surrender with an ownership change.

NYT > Citigroup Inc.

Updated: March 5. 19, 2010

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. The deal brought traditional banking, insurance and Wall Street businesses, like stock underwriting, under one roof. Mr. Weill's vision was of a financial superpower dominating global markets.

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.

Following Bank of America's announcement to repay its $45 billion federal loan, Citigroup announced a broad program on Dec. 14, 2009  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 will forge 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, the chief executive of Citigroup, Vikram S. Pandit,  told a congressional oversight panel that he was moving aggressively to break up the bank, selling 40 percent of the company, and reining in excessive risk-taking.

Read More...

Creating Citigroup

The bruising chain of events for Citigroup was a giant comedown from Mr. Weill's hopes. To create Citigroup, he had led the lobbying effort to repeal the Depression-era Glass-Steagall laws separating commercial and investment banks, had pushed out Citicorp's head, John Reed, after an awkward period in which they were co-chairmen 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 on Dec. 16 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.

After two years at the helm, Mr. Pandit is facing a crucial year at the troubled giant. He must staunch the losses in the bank's consumer businesses and shift the bank's strategy, and investors are growing impatient. All the while, he must address the demands of a multitude of government overseers. Although Citigroup began disengaging from the government in December 2009, taxpayers still have more than $25 billion in the bank and hold 27 percent of the company.

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.

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News for Citigroup Inc. - Google Finance
News for Citigroup Inc. - Google Finance