CitiGroup's $1.1 Trillion of 'Mysterious Assets Shadow Earnings': Bloomberg

CitiGroup's $1.1 Trillion of 'Mysterious Assets Shadow Earnings': Bloomberg

www.bloomberg.com

At an investor presentation in May, Citigroup Inc. Chief Executive Officer Vikram Pandit said shrinking the bank's $2.2 trillion balance sheet, the biggest in the U.S., was a cornerstone of his turnaround plan.

Nowhere mentioned in the accompanying 66-page handout were the additional $1.1 trillion of assets that New York-based Citigroup keeps off its books: trusts to sell mortgage-backed securities, financing vehicles to issue short-term debt and collateralized debt obligations, or CDOs, to repackage bonds.

(visit the link for the full news article)

Why do I keep getting the sinking feeling that the system of checks and balances for fraud in the corpo-giant industry have all but vanished? It feels like this country has turned into an old school neighborhood, being ran by a enormous mafia group, who plunders and pillages the helpless peons at will, and they are aided and abetted by the ever corrupt gov and fed...This sickening greed and lawlessness never ends!

Seven of the biggest U.S. banks, including Citigroup, are on the hook for at least $300 billion of credit and liquidity guarantees for off-balance-sheet loans and bonds, according to a June 30 report from consulting firm RiskMetrics Group Inc. in Rockville, Maryland. Such guarantees were remote when pledged as an inducement to bond buyers. Now, the first year-over-year decline in housing prices since the Great Depression and rising home-loan, commercial-mortgage and credit-card delinquencies have begun to trigger them.

www.bloomberg.com
(visit the link for the full news article)

hehe DD you do find the stories and the descriptions you give I can picture. I picture these mafioso bosses walking up to houses with a few of the boys to collect their monthly security money Interesting article though Im curious to know what the hell is shaking also. Good find.

I guess this could be a hint towards the answer to my favorite question: "Where is the wealth going?".

You know, if I were a radical sort, I would swear that we are being victimized by treasonous bankers, corporate moguls, and government officials. Maybe I am a radical sort after all?

Originally posted by Maxmars
I guess this could be a hint towards the answer to my favorite question: "Where is the wealth going?".

You know, if I were a radical sort, I would swear that we are being victimized by treasonous bankers, corporate moguls, and government officials. Maybe I am a radical sort after all?

Not at all my friend. When you play the game follow the money you start to see some crazy things. Like who funds the wars, or who funds this, or who funds that. The wealth is all going to the top and that is why we are having this situation. Theres A LOT of dollars out there but 90% of it is in the top 1% hands. When the people dont have money to spend everyone suffers. Its called Fordism. The CEOs of today dont realize this though. Its take what you can when you can and screw everyone else.

reply to post by DimensionalDetective


Well you know that one of heir biggest investors are the Saudis, so Is not surprise to imagine from where the money comes.

Now in the US is a limit as how much foreign investors can buy into America financial system.

But we all know that since the Bush administration that is now an oversight.

Have to give it to the corporate fat rats they all stink of ca-ca.



[edit on 14-7-2008 by marg6043]

``You will rapidly realize what a farce these off-balance- sheet things are,'' said Ladenburg Thalmann & Co. analyst Richard X. Bove. ``You could pick up a lot of loan losses with the stuff you're putting back on.''

So they are lying on their balance sheets and they are being exposed because they are loosing money now? Am I anywhere in the ballpark on that assumption?

Originally posted by Techsnow

``You will rapidly realize what a farce these off-balance- sheet things are,'' said Ladenburg Thalmann & Co. analyst Richard X. Bove. ``You could pick up a lot of loan losses with the stuff you're putting back on.''

So they are lying on their balance sheets and they are being exposed because they are loosing money now? Am I anywhere in the ballpark on that assumption?

From what I understand things could hit the banks extremely hard once the FDIC starts selling off IndyMac's assets. If the banks haven't marked down their assets enough in their mark to market accounting, then they will be more or less forced to mark down those assets to match what the FDIC got in the open market. The problem is that the IndyMac asset sale will be a fire sale, and could be extremely "cheap" as a result.

Hey Yellow!!!

Yeah Im licking my chops at the financials. Im wanting to go in but I keep holding myself back knowing the some sort of bottom or close to it has to come soon. I think the banks over the next 5 years are going to make a KILLING.

Originally posted by mybigunit
Hey Yellow!!!

Yeah Im licking my chops at the financials. Im wanting to go in but I keep holding myself back knowing the some sort of bottom or close to it has to come soon. I think the banks over the next 5 years are going to make a KILLING.

I agree with you, but I would hold off until we see a massive panic sell. I think when Citi Group's stock is in the single digits, then it's a massive buying opportunity, but I would wait for more banks for fail. I want to see some massive panic selling before I put more money in the banks. I can't wait to buy Goldman Sachs and Citi on the cheap.

[edit on 14-7-2008 by yellowcard]

Originally posted by yellowcard

Originally posted by mybigunit
Hey Yellow!!!

Yeah Im licking my chops at the financials. Im wanting to go in but I keep holding myself back knowing the some sort of bottom or close to it has to come soon. I think the banks over the next 5 years are going to make a KILLING.

I agree with you, but I would hold off until we see a massive panic sell. I think when Citi Group's stock is in the single digits, then it's a massive buying opportunity, but I would wait for more banks for fail. I want to see some massive panic selling before I put more money in the banks. I can't wait to buy Goldman Sachs and Citi on the cheap.

[edit on 14-7-2008 by yellowcard]

GS Especially !!!!! Yeah Citi and Goldman are my two that I watch daily LOL thats funny. Yeah Im with you also in the fact I want to see more blood in the streets. When when the panic sell happens Im in. I even think Citi $10 to $11 is a great buy. I dont know if Ill have the will to test to see if it gets to single digits

Here is some interesting/dry reading. on the GAAP of off balance sheet items.

§ 615.5212 Credit conversion factors--off-balance sheet items.
(a) The face amount of an off-balance sheet item is generally incorporated into risk-weighted assets in two steps. For most off-balance sheet items, the face amount is first multiplied by a credit conversion factor. (In the case of direct credit substitutes and recourse obligations the full amount of the assets enhanced are multiplied by a credit conversion factor). The resultant credit equivalent amount is assigned to the appropriate risk-weight category described in § 615.5211 according to the obligor or, if relevant, the guarantor or the collateral.
Credit conversion factors for off-balance-sheet items and also www.fca.gov...

[edit on 14-7-2008 by Swingarm]