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Tuesday, March 10, 2009

Citigroup: Posted a Profit? Surely That Can't Be

Errr... that's odd. Citigroup (C) says they made money. Surely there's been a mistake somewhere.

Everything is massively oversold. So this kind of news should inspire a bounce that lasts longer than a few minutes. Bearish momentum has been waning. Friday Was a Sign of Indecision. Maybe, just maybe this will shift the balance of power and inspire one of those fun, "rip your face off" short covering rallies...

Citigroup Chief Pandit Says Bank Having Best Quarter Since 2007: "Citigroup Inc. Chief Executive Officer Vikram Pandit said his bank is having the best quarter since 2007, when it last posted a profit.

“I am most encouraged with the strength of our business so far in 2009,” Pandit wrote in an internal memorandum obtained today by Bloomberg. “In fact, we are profitable through the first two months of 2009 and are having our best quarter-to-date performance since the third quarter of 2007.” The bank had $19 billion of revenue in January and February before disclosed writedowns, he added.

Citigroup has logged five quarters of losses totaling more than $37.5 billion since it posted a $2.2 billion profit in the third quarter of 2007. Once the world’s biggest bank by market value, the bank fell below $1 in New York trading last week for the first time as investors lost confidence that the shares can recover after losses and a government rescue.

“I am, like you, disappointed with our current stock price and the broad-based misperceptions about our company and its financial position,” Pandit wrote. The price doesn’t reflect the bank’s capital strength and earnings potential, he added.

Citigroup jumped 14 percent to $1.20 in German trading today. The stock has tumbled 95 percent in the past year, cutting the bank’s market value to about $5.8 billion, less than Japan’s Nomura Holdings Inc. and Turkey’s Akbank TAS, in which Citigroup owns a 20 percent stake. The bank is the smallest company and the worst-performing stock in the 30-member Dow Jones Industrial Average."

15 comments:

Noodles said...

How long would this sucker rally last until another wave of bad news is the question...

TulsaTime said...

Easy to operate at a profit as long as you can keep from realizing mo' crud like dis.....

the next wave approacheth!

S&P Puts $552.8 billion Alt-A MBS on Downgrade Watch

by CalculatedRisk

on 3/09/2009 10:37:00 PM

From the WSJ: S&P Puts Mortgage-Backed Securities on Downgrade Watch

Standard & Poor's Ratings Service on Monday placed its ratings on $552.8 billion worth of U.S. first-lien Alt-A residential mortgage-backed securities issued between 2005 and 2007 on watch for downgrade, saying it sees an increase in losses from the transactions issued in those years.
...
S&P said it believes continued foreclosures, distressed sales, an increase in carrying costs for properties in inventory and more declines in home sales will further depress prices and lead to higher losses.

Anonymous said...

Finally the recession is over!
Dow 35000 next

none said...

It's not his first optimistic memo, 2008/mar/09:
"Last Thursday, the CEO tried to put a positive spin on the situation in a memo to staff. In it, he conceded Citigroup faces a 'challenging economic environment' but said 'fundamentally we remain strong'. He was also upbeat about the foreign cash injection, saying that capital is at 'a level that was stress-tested against a number of economic downturns'."
http://www.guardian.co.uk/business/2008/mar/09/citigroup.banking

VegasRage said...

Hey imagine that a CEO saying their company is doing well. Well I never...

Anonymous said...

Maybe Citigoup bought lots of calls on it's own stock - so now it has a profit ;-p

sc said...

They are marking their liabilities to market. Bingo => Profit!

Anonymous Monetarist said...

Uh ... they are profitable not including write-downs.

Methinks every Wall Street Bank would have been profitable 2007-2008 if it hadn't been for those gosh darn pesky write-downs.

Anonymous said...

Sure they made a profit! I beleive it!!!

unfortunately they will have to fire everybody so they can avoid loosing it on payroll expenses...

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