The Golden Truth: Citigroup 3rd Quarter Results Do Not Disappoint

Monday, October 17, 2011

Citigroup 3rd Quarter Results Do Not Disappoint

my expectations that it would be at least as fraudulent as was JP Morgan's. Caution: investing based on bank earnings headlines can be hazardous to your wealth.

True to his corrupt character, Citigroup CEO Vik Pandit ushered in Citi's headline-reported bullshit by exclaiming that "Citi continues to navigate a challenging economic environment and delivered another quarter of solid operating results."

Citi reported Q3 net income of $3.8 billion and revenues of $20.8 billion, both on a "headline" basis above Q3 2010 and 3 cents above Wall Street estimates. Now for my "however" reality analysis. Citigroup included $1.9 billion in its revenues by pretending to go out and buy back its debt at a discount (CVA) and it reduced its loan loss reserve by $1.4 billion. By pretending to buy back its debt, Citi boosted its reported net income by 39 cents per share. While it's not being discussed, probably because Citi didn't show the math in its earnings report like it did the debt buy back fiction, the loan loss credit is a direct add-in to net income, and thus contributed about 47 cents to its bottom line. Both the CVA and loan loss fraud boosted Citi's reported, headline net income per share by 76 cents. Both of these revenue/income add-backs are non-cash and did nothing to generate any kind of real cash flow or economic benefit for the company. They are pure, 100% unadulterated earnings "management" - i.e. fraud - maneuvers.

So the TRUTH of the matter is that a better GAAP estimate of Citi's earnings per share would be 37 cents per share, instead of the $1.23 per share headline report. A huge miss vs. Wall Street expectations. If you look at just the "organic" business numbers, Citi's revenues declined vs. the same quarter in 2010. It's business and net income are getting smaller. Shining a spotlight on the truth therefore makes CEO Vik Pandit a liar, because the true business results are anything but "solid." Here's the 8-K filed with the SEC, for anyone who wants to ruin their evening by looking through it: LINK

Remember, Citigroup is still partially owned by the Treasury/Taxpayer, so when Citi pays that scumbag a big bonus this year, it will be your tax dollars he receives, not any kind of "economic rent" - i.e. real cash flow - generated by Citi's business model.

Speaking of Taxpayer-owned "special needs" corporations, I see AIG is once again hosting lavish sales parties at expensive resorts. You can read about it HERE That's just more of your tax dollars going down the crapper in the form of expensive wine, food and - most likely at night - Charlie Sheen-style hookers.

One more point on the Citi financials. I don't have time to really go through the recent 8-K and latest 10-K and show where Citi is really committing fraud. But I can guarantee that on a true "cash basis" and "market value" basis, Citi is insolvent.

3 comments:

silvergoldsilverMonday, 17 October, 2011
Lets talk about more important things like another CFTC anti climax tomorrow. Citi is dead to me.
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AnonymousMonday, 17 October, 2011
What was that broken hedge fund pandit the bandit dumped onto citi?

Dylan Ratigan interviews David DeGraw about the political impact of Occupy Wall Street, and Bill Black joins to discuss legal strategies.

http://www.nakedcapitalism.com/2011/10/dylan-ratigan-on-the-political-efforts-to-hijack-occupywallstreet.html
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AnonymousTuesday, 18 October, 2011
Sprott plans a gold bank without loans or leverage

Eric Sprott, one of the most vocal critics of the global financial system, wants to start a bank. But it won't be like any bank most people are used to seeing.

Mr. Sprott and the asset management firm he founded, Sprott Inc., are investing in an Ontario-based currency trading company known as Continental Currency Exchange Corp. They, along with the current management of Continental, are applying to federal regulators for permission to turn the 17-branch operation into the Continental Bank of Canada. They expect to get a decision early next year.

The bank Mr. Sprott and his partners envisage would seek to address all the things that Mr. Sprott has warned against in the global financial system, such as too much leverage and a lack of confidence in paper currency.

Continental Bank would take deposits, but it would make no loans, unlike most current banks that are built on a model of lending out far more money than they actually have on hand.

http://gata.org/node/10574
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Why Gold?

Gold is the world's oldest currency. You exchange your fiat currency (dollars, euros, yen, yuan) into gold as an insurance policy against catastrophic Central Bank and Government policies which serve to destroy the value of fiat currencies and destroy democracy.

Gold can ONLY be considered an investment to the extent that it remains significantly and historically undervalued in relation to the fiat currencies against which its value is measured. Otherwise it remains the world's oldest currency and is completely free from the counterparty risk associated with currency by Government fiat (i.e. fiat currencies rely on a Government's "full faith and credit.")

Quote Of The Month Courtesy of "Jesse"

Unfortunately for Larry Summers, Ben Bernanke, and their friends at the BIS, they have not yet figured out how to print physical gold, silver, and other essential commodities, and the world is reaching the point where it might simply start ignoring the New York based markets with respect to essential commodities such as basic materials, oil, foodstuffs, and the like, as they become increasingly irrelevant, fraudulent, and Orwellian. And then where will the financial engineers be, except with no more excuses and no place to hide?

Here is the link to his entire commentary, well worth a read:

http://jessescrossroadscafe.blogspot.com/2010/07/gold-daily-chart-shock-and-awe-for.html

Great Quote From Jim Rogers On Govt CPI Reporting

JR: I mean, we have inflation now. If you go to the shop, whether it’s groceries, or education or insurance or health care, prices are going up for everything. The government lies about it in the US. Some countries lie, many countries don’t: Australia, China, India and Norway. Many countries don’t lie about it and acknowledge that we have inflation. Others lie about it, the UK and the US, but if you go shopping you know prices are up.

Q: Are you saying that the American Consumer Price Index (CPI) published by the US Bureau of Labor Statistics is a lie?

JR: In my opinion, yes, of course it is. Have you looked at it? They’ve changed their accounting several times in the past few decades. When housing was 20% to 25% of the CPI and housing was going up, they didn’t count it, saying rents weren’t going up, and then when home prices started going down, they counted it. It’s the same with many things. It’s staggering some of the tortuous reasoning that the BLS has used over the past 25 or 30 years. When the price of gasoline goes up, they say it’s not really going up because it’s better gasoline, better quality, therefore you’re getting more for your money. I mean, it’s endless, the stuff that they say and for some reason people sit there, although more and more people are catching on, and accept what the government says.

source: www.clusterstock.com

Quote of the Week

"The primary function of a Central Bank is to engage in the massive transfer of wealth from the middle class to the wealthy elite. The Federal Reserve was set up to do this with the blessing and support of Congress." - Dave in Denver

If you refuse to believe the above, please read "The Creature From Jekyll Island: A Second Look at the Federal Reserve" by G. Edward Griffin and then explain to me why the Senate voted down the Vitter Amendment and Congress refuses to pass a law requiring a full audit of the Fed, even though the Fed is using taxpayer-backed money to bailout Wall Street and Europe.