Pandit Says Citigroup Having Best Quarter Since 2007

keep reading.

"David Williams, head of European bank research at Fox-Pitt Kelton, said Citigroup needed to disclose more about its tests.

"Had you invested on the back of anything said by these management teams over the last 12 months you would have lost pretty much all of your money," he said. "So there is a credibility issue. A one-dollar stock price tells you the market has stopped listening."

The point I am making is that banks are starting to make money again. I am not advising to buy Citi stock nor do I work there. All I said a couple of weeks ago was that my bank and some other banks are starting to make money again.

upeast: you are correct, they are all making money in Q1. Especially most areas of fixed income. Will commercial banks use these profits to take provisions against cc, al and cl.? Who knows. IB's should report good earninmgs mid apr.

That's why I am out bidding now. I still think it's a good time to buy. Peope are so down and that gives me more room. Also, I am worried about the massive amount of cash I am sitting on.

"banks are starting to make money again."

Not really. There is a HUGE difference between an "operating profit" and a profit. An operating profit for a bank is before credit losses.

it's a good time to buy now because banks are making money? or because you expect them to book large reserves against ongoing credit losses? why are you worried about your cash? do you expect the fdic to go belly up?

All of the CEO's have reported greater activity. However, does this translate into greater purchasing power with regards to NYC RE.? I don't think so. Is it enough to influence confidence? and public perception? maybe. Maybe it is just enough to slow the rate of decline, I hope so. It is still difficult to overcome the extreme supply/demand imbalance and the acceleration of stressed sales. In spite of all this, I share some of your views, but am probably 4-6 months in your rear view mirror....peace

I love my cash. In terms of the real estate market, going forward, how many new bankers, lawyers, etc. are being brought into that beautiful cycle of real estate? What are hiring estimates for this year and next?

Nobody would argue that banks scraping themselves out of the barrel is not a good thing. But that's a far cry from said banks generating enough to keep a market bubble that was fueled for years by so many untenable factors afloat. Also, as Steve points out, those certain costs do take a bite out of profits, don't they? Excluding certain... has to be one of financial analysts favorite phrases.

columbiacounty, once bankers will feel more confident again, they will buy. And I am competing with them in the Classic 7/8 space. Secondly, I am starting to get worried about inflation. I am sitting on this huge pile of cash. What do I do with it when inflation goes up substantially?

Citibank is up only 2 cents at the moment to $1.05. 9:40 am
http://search.us.reuters.com/rsearch/rcomSearch.do?blob=c&WTmodLoc=ussrch-top-quote

a_g: You don't get my point. I am not saying that Citi is a good investment. I am talking about profitability of banks. Citi has lots of other problems.

In 1998-2000 there were a good number of bankers in NYC. Many of them had really lovely apartments, when the supply of lovely apartments was lower (not pre-war obviously, but total). They had paid nowhere near peak prices. Why, with income slated to be so much lower and so many fewer bankers with jobs, would you expect any portion of the market to improve in the near term? UD is reporting the sharpest declines (he's guesstimating based on observation) to be in the high end.

I'll leave aside the inflation issue for now. I think long-term inflation is probably inevitable. I have little to no confidence that the Central Banks will be able to time the money supply perfectly. But over the next couple of years, if you look at the massive amounts of household wealth that have been eliminated, I don't think inflation is in the picture. Check out Rosenberg's recent analysis. I think Shedlock has it up.

can inflation go up without interest rates following? how can inflation work in a deflationary environment? if no one is buying anything either because of fear, lack of funds or a belief that prices will go lower in the future, how does a manufacturer successfully raise prices? not trying to be a wise guy...I am genuinely fascinated (and confused and somewhat horrified) by the entire situation.

uppereast, we are in the 2/3rd inning of the correction in manhattan real estate. particularly at the size/price point you are considering. i'm not going to go into the whole argument for why there is more downside now. we've both seem all of them. so if you are bidding at a level that reflects further significant price drops, then that's cool. the problem is very few people will be willing to accept a great classic 7/8 in a good area for $600/sq foot right now. so it's sort of a waste of time. for me, it's better to wait until the inventory keeps building and mkt keeps softening until that no longer becomes a ridiculous bid. if the market is say, around $950/sq ft now, then few will be willing to sell for less than $900. But when market falls to $650-700, then a $600 low ball is at least possible. either way, good luck w/ your bids.

aboutready, I am looking at a very small segment of the market (prewar, Park or West of Park). There is still not that much supply. We were looking last Feb and there was less but not that much less. Inflation makes me anxious. Way too much cash to just sit on.

uppereast - I think you correlate Citibank or other banks pickup in business to Manhattan real estate too closely. How will this change those that MUST sell and those that are scared to buy because of deteriorating local macro fundamentals?

I can see it already. Dow plunges 60%. THEN, we get a 20% bear rally, which is fine and I hope so cause Im long now. Once the rally hits, and we go from DOW 6500 to DOW 7700, everyone starts saying Manhattan bottom is in, and rebound is imminent.

Thats my prediction

you can have commodity inflation, but not probably wage. but some of the best (who knows what that implies) minds don't agree in the slightest on this issue. stagflation would, of course, be accomplished through a major reduction in our standard of living. higher prices, same or lower wages, fewer goods and services produced. it is horrifying.

UD, maybe I am correlating it to closely. My point is that not too many people are looking to buy right now and there are some great discounts out there. Once people feel better again, they will start looking again and compete with me. True, there will be distressed sellers but as long as I am close enough to the bottom I am OK. What is your outlook on inflation?

UD, I think you're about to get your bear rally. Just a sense, but it may be another short one. There's alot of upward sentiment, along with a ton of downward news. The battle of the wills.

No one gets it - an "operating profit" is NOT a profit. It is the difference between operating revenue and operating expenses. It does not include credit losses, special charges, amortization, depreciation, or taxes. It does NOT mean that Citibank will post an actual profit. They may, they may not. But it's not what it means.

uppereast, don't get me wrong. If you find a place you're comfortable with, and you decide to go for it, great. I just don't think you can make a case from a strictly financial sense, beyond your specific circumstances at least. Finding a place to live shouldn't necessarily be strictly financial, but as a result of uncertainty and loss of income/wealth, for most people it has become a necessity. The parameters seem different to most now, you wouldn't want to buy unless you knew you could comfortably afford to remain in a given place for a good 7-10 years, your income is secure, and not many people can say that.

uppereast - im not worried about inflation at all right now. im worried about deflation, deleveraging, writing down bad debts, letting bad models die, restructure, etc..feds balance sheet will expand as this deleveraging process continues. Inflation is a worry for later, but it wont be the type of inflation that sees real estate surge, or wages surge. It will be in food, energy, health care, etc..

Yet to see household deleveraging, and that is why I dont even think to correlate any pickup in banking business, or any equity rally to Manhattan real estate. Manhattan real estate is in its own process, neither of those two things will change that. Maybe for few, but not for the market. If corporate deleveraging lasted 18 months so far, household deleveraging can be another 18 months. Maybe we are a few months into that process now. Thats how I am thinking. For stocks, people got murdered. totally murdered. many sold out and couldnt take it anymore. many wont participate in bear rallies. traders do. but consumer fear selling tends to mark temp bottoms and traders will swing the market higher for a bit. Until the next wave of realization hits that households are still deleveraging.

Actually steve, I do get it. I think I said something the other day about p/e estimates and using gaap estimates vs. operating profits. I love the excluding some charges one. Wow, so many things can go wrong, and you don't have to count it in your profits estimate.

aboutready - we'll see...i hope so. big question is how far it goes. these bear rallies usually are sharp/fierce and about 20% or so. Thats what helps you know its a bear rally, or short covering/tradable rally.

"Once people feel better again, they will start looking again and compete with me. True, there will be distressed sellers but as long as I am close enough to the bottom I am OK. "

So we peaked in 3Q08, then not even 6 mos post collapse of Lehman we are now "close enough" to a bottom? I hope you are not serious when you say that.

can we return to inflation for a moment?

i still don't see how it can happen when no one seems to be buying anything. no demand= no inflation.

UD -

If this rally holds... kudos to you. You called it. I remember your thread a couple days ago about picking up VNO and such...

"I can see it already. Dow plunges 60%. THEN, we get a 20% bear rally, which is fine and I hope so cause Im long now. Once the rally hits, and we go from DOW 6500 to DOW 7700, everyone starts saying Manhattan bottom is in, and rebound is imminent. "

Even if we do get an equity market rally, I think probably some transactions will pick up but it will not be nearly enough to offset job losses in nyc, the structural and permanent shrinkage of wall street, higher real estate taxes, lower deductible interest, fact that the gov't now owns banks and will limit comp, etc. A rally in the markets and a pick up in some banking business is a far cry from that translating to stabilizing manhattan real estate prices.

special_K, aren't you a little to cute here. You are saying you will see $600/sft for Park Ave apartments? That means you can buy a Classic 7 on Park Ave for $1.4mm??? Good luck to you.

of course, but emotion is part of the equation.

let's say you've looked at a place---you really like it....still way overpriced (intellectually). market goes up 20%. broker calls with usual "get ir now." you might take the leap.

Uppereast..thanks for the post, you did call it a month ago when you said banks are performing much better. Keep posting the good news. Don't get discouraged by our above negative posse. They desperately want to own and will believe anything that makes them feel as if they will. But in reality they will still be renting and posting the same cr-p here 10 yrs from now.

columbia, no one is saying inflation happens now. we are clearly in a deflationary period. it's the trillions upon trillions that all the governments of the world are printing that leads to inflation. we are not going to see it in the next several months, but when it does show up, it's going to be almost an unstoppable force because we have never had this much stimulus/easing in the history of the world. you can't just print money and have no impact. something doesn't come from nothing. the germans did it at the end of world war II and you can see how much the deutschemark was worth towards the end. if inflation gets out of control, it winds up eating into and hampering economic growth.

thx nyc10022 for remembering that...still holding gold though and that is taking a breather again. hate when that turns, its always fast. Like bear rally in reverse.

I think pickup in activity in Manhattan has been occurring since late January or so. So we will see data showing that soon, but it was in place before any equity rally. So I dont think the rally is the cause, its just the same timing so people correlate it. Take a look at higher end. Take a look at 1070, 1075, 1165 Park Ave...where do you think some of those 6s, 7s, and 8s will trade at when we see the transaction closed sometime later in 2009? How low from peak? Im sure some of these sellers will hit a bid at some point.

Tell us about your "huge cash" hoard a little bit more.

upper- fine, maybe 800 sq foot or whatever for park ave. i am looking for downtown lofts so i have no idea what the appropriate price over there is. i just know it will be lower than it is now.

Steve - You are correct and your last post helps, I think, becasue you are giving people a better idea of how it is different...thanks for that.

The big problem is still that banks are still not lending money to people, and more damaging, to businesses. If the credit markets aren't loosened soon things are going to get a lot worse.

"let's say you've looked at a place---you really like it....still way overpriced (intellectually). market goes up 20%. broker calls with usual "get ir now." you might take the leap."

Yes, to an extent, I would agree with that. Some will. But not enough to move the entire market or prevent the current overall trend. Summer is close, I dont expect any pickup to last past June. What happens when market slows again?

Columbia - about inflation - I've read that government efforts to spur growth can lead to inflation.

I couldn't explain exactly why, I'm not in the finance or economics business.

But common sense would make one think that if the goverment is pumping billions into the economy by spending on everything from bank bailouts to road construction our dollars will be worth less. Of course this would be offset by job losses and low growth right now.

don't forget the media effect as well. a couple of stories about surprising RE price and transaction rebound due to market uptick goes a long way.

special_k, what was the deal with the "lost" decade in Japan? Didn't they undergo an extended period of deflation? Did Japan pump money into the economy the way we are doing?

Columbia, I'm with UD, inflation is sometime in the future. Our government DREAMS of inflation right now, happy little thoughts of moderatly rising prices, lower valued (but not hugely so) dollar, money zipping here and there. But all they can hope to accomplish is fill up some of the holes left by all the paper wealth/credit (and wages and tax revenues) disappearing. It may not have all been real money, but it sure bought a hell of alot.

Too big to fail? 5 biggest banks are 'dead men walking'

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By Greg Gordon and Kevin G. Hall, McClatchy Newspapers Greg Gordon And Kevin G. Hall, Mcclatchy Newspapers – Mon Mar 9, 5:19 pm ET
Featured Topics:

* Barack Obama
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Banks: Too Big to Fail? Play Video ABC News – Banks: Too Big to Fail?

* Ask Warren: Banks Should Get Back to Banking Play Video Video:Ask Warren: Banks Should Get Back to Banking CNBC
* Banks To Blame? Play Video Video:Banks To Blame? CNBC

A Wells Fargo bank branch is framed by North Table Mountain in Golden, Colorado Reuters – A Wells Fargo bank branch is framed by North Table Mountain in Golden, Colorado January 28, 2009. (Rick …

WASHINGTON — America's five largest banks, which already have received $145 billion in taxpayer bailout dollars, still face potentially catastrophic losses from exotic investments if economic conditions substantially worsen, their latest financial reports show.

Citibank, Bank of America , HSBC Bank USA , Wells Fargo Bank and J.P. Morgan Chase reported that their "current" net loss risks from derivatives — insurance-like bets tied to a loan or other underlying asset — surged to $587 billion as of Dec. 31 . Buried in end-of-the-year regulatory reports that McClatchy has reviewed, the figures reflect a jump of 49 percent in just 90 days.

The disclosures underscore the challenges that the banks face as they struggle to navigate through a deepening recession in which all types of loan defaults are soaring.

The banks' potentially huge losses, which could be contained if the economy quickly recovers, also shed new light on the hurdles that President Barack Obama's economic team must overcome to save institutions it deems too big to fail.

While the potential loss totals include risks reported by Wachovia Bank , which Wells Fargo agreed to acquire in October, they don't reflect another Pandora's Box: the impact of Bank of America's Jan. 1 acquisition of tottering investment bank Merrill Lynch , a major derivatives dealer.

Federal regulators portray the potential loss figures as worst-case. However, the risks of these off-balance sheet investments, once thought minimal, have risen sharply as the U.S. has fallen into the steepest economic downturn since World War II, and the big banks' share prices have plummeted to unimaginable lows.

With 12.5 million Americans unemployed and consumer spending in a freefall, fears are rising that a spate of corporate bankruptcies could deliver a new, crippling blow to major banks. Because of the trading in derivatives, corporate bankruptcies could cause a chain reaction that deprives the banks of hundreds of billions of dollars in insurance they bought on risky debt or forces them to shell out huge sums to cover debt they guaranteed.

The biggest concerns are the banks' holdings of contracts known as credit-default swaps, which can provide insurance against defaults on loans such as subprime mortgages or guarantee actual payments for borrowers who walk away from their debts.

The banks' credit-default swap holdings, with face values in the trillions of dollars, are "a ticking time bomb, and how bad it gets is going to depend on how bad the economy gets," said Christopher Whalen , a managing director of Institutional Risk Analytics, a company that grades banks on their degree of loss risk from complex investments.

J.P. Morgan is credited with launching the credit-default market and is one of the most sophisticated players. It remains highly profitable, even after acquiring the remains of failed investment banker dealer Bear Stearns , and says it has limited its exposure. The New York -based bank, however, also has received $25 billion in federal bailout money.

Gary Kopff , president of Everest Management and an expert witness in shareholder suits against banks, has scrutinized the big banks' financial reports. He noted that Citibank now lists 60 percent of its $301 billion in potential losses from its wheeling and dealing in derivatives in the highest-risk category, up from 40 percent in early 2007. Citibank is a unit of New York -based Citigroup . In Monday trading on the New York Stock Exchange , Citigroup shares closed at $1.05 .

Berkshire Hathaway Chairman Warren Buffett , a revered financial guru and America's second wealthiest person after Microsoft Chairman Bill Gates , ominously warned that derivatives "are dangerous" in a February letter to his company's shareholders. In it, he confessed that he cost his company hundreds of millions of dollars when he bought a re-insurance company burdened with bad derivatives bets.

These instruments, he wrote, "have made it almost impossible for investors to understand and analyze our largest commercial banks and investment banks . . . When I read the pages of 'disclosure' in (annual reports) of companies that are entangled with these instruments, all I end up knowing is that I don't know what is going on in their portfolios. And then I reach for some aspirin."

Most of the banks declined to comment, but Bank of America spokeswoman Eloise Hale said: "We do not believe our derivative exposure is a threat to the bank's solvency."

While Bank of America advised shareholders that its risks from these instruments are no more $13.5 billion , Wachovia last year similarly said it could overcome major risks. In reporting a $707 million first-quarter loss, Wachovia acknowledged that it faced heavy subprime mortgage risks, but said it was "well positioned" with "strong capital and liquidity." Within months, losses mushroomed and Wachovia submitted to a takeover by Wells Fargo , which soon got $25 billion in federal bailout money.

Trading in credit-default contracts has sparked investor fears because they are bought and sold in a murky, private market that is largely out of the reach of federal regulators. No one, except those holding the instruments, knows who owes what to whom. Not even banks and insurers can accurately calculate their risks.

"I don't trust any numbers on them," said David Wyss , the chief economist for the New York credit-rating agency Standard & Poor's .

The risks of these below-the-radar insurance policies became abundantly clear last September with the collapse of investment banker Lehman Brothers and global insurer American International Group , both major swap dealers. Their insolvencies threatened to zero out the value of billions of dollars in contracts held by banks and others.

Until then, "we assumed everyone makes good on the contracts," said Vincent Reinhart , a former top economist for the Federal Reserve Board .

Lehman's and AIG's failures put in doubt their guarantees on hundred of billions of dollars in contracts and unleashed a global pullback from risk, leading to the current credit crunch.

The government has since committed $182 billion to rescue AIG and, indirectly, investors on the other end of the firm's swap contracts. AIG posted a fourth quarter 2008 loss last week of more than $61 billion , the worst quarterly performance in U.S. corporate history.

The five major banks, which account for more than 95 percent of U.S. banks' trading in this array of complex derivatives, declined to say how much of the AIG bailout money flowed to them to make good on these contracts.

Banking industry officials stress that most of the exotic trades are less risky — such as interest-rate swaps, in which a bank might have tried to limit potential losses by trading the variable rate interest of one loan for the fixed-rate interest of another.

In their annual reports to shareholders, the banks say that parties insuring credit-default swaps or other derivatives are required to post substantial cash collateral.

However, even after subtracting collateralized risks, the banks' collective exposure is "a big, big number" and a matter for concern, said a senior official in a banking regulatory agency, speaking on condition of anonymity because agency policy restricts public comments.

In their reports, the banks said that their net current risks and potential future losses from derivatives surpass $1.2 trillion . The potential near-term losses of $587 billion easily exceed the banks' combined $497 billion in so-called "risk-based capital," the assets they hold in reserve for disaster scenarios.

Four of the banks' reserves already have been augmented by taxpayer bailout money, topped by Citibank — $50 billion — and Bank of America — $45 billion , plus a $100 billion loan guarantee.

The banks' quarterly financial reports show that as of Dec. 31 :

— J.P. Morgan had potential current derivatives losses of $241.2 billion , outstripping its $144 billion in reserves, and future exposure of $299 billion .

— Citibank had potential current losses of $140.3 billion , exceeding its $108 billion in reserves, and future losses of $161.2 billion .

— Bank of America reported $80.4 billion in current exposure, below its $122.4 billion reserve, but $218 billion in total exposure.

— HSBC Bank USA had current potential losses of $62 billion , more than triple its reserves, and potential total exposure of $95 billion .

— San Francisco -based Wells Fargo , which agreed to take over Charlotte-based Wachovia in October, reported current potential losses totaling nearly $64 billion , below the banks' combined reserves of $104 billion , but total future risks of about $109 billion .

Kopff, the bank shareholders' expert, said that several of the big banks' risks are so large that they are "dead men walking."

The banks' credit-default portfolios have gotten little scrutiny because they're off-the-books entries that are largely unregulated. However, government officials said in late February that federal examiners would review the top 19 banks' swap exposures in the coming weeks as part of "stress tests" to evaluate the institutions' ability to withstand further deterioration in the economy.

Representatives for Citibank, J.P. Morgan and Wells Fargo declined to comment.

Hale, the Bank of America spokeswoman, said that the bank uses swaps as insurance against its loan portfolio — they "gain value when the loans they are hedging lose value."

She said that Bank of America requires thousands of parties that are guarantors on these insurance-like contracts to post "the most secure collateral — cash and U.S. Treasuries, minimizing risk roughly 35 percent." The collateral is adjusted daily.

Bank of America's report of an $80.4 billion exposure doesn't count the collateral and "also assumes the default of each of the thousands of counterparty customers, which isn't likely," Hale said. Counterparties are the investors on the other side of the deal, often other banks or investment banks.

In response to questions from McClatchy , HSBC spokesman Neil Brazil said that the bank closely manages its derivatives contracts "to ensure that credit risks are assessed accurately, approved properly (and) monitored regularly."

BoA CEO lewis said the same thing about the 1stQ a month ago. That BoA was having a good month.

I like this thread. ya let's keep it on top..:)

So, half the number of people will have jobs here, and top salaries are capped, and the rest will be able to generate less money for their companies AND we'll have 300 million eyes on their paychecks and there is the, oh yeah, hundreds of billions to pay back (several times even peak bonususes) and this is the "good news" / best case scenario.

Exactly how is this supposed to mean anything but a continued slide in Manhattan RE?

Has anyone else noticed how the StreetEasy banner advertising has begun to seem a bit strange. The other day I think it was Florida? Someplace resorty, so maybe it made sense. But today New Orleans? Have the NY advertisers just given up until April?

I see columbia university medical center.... maybe for all the heart attacks!

so a couple of CEOs without any credibility whatsoever say literally "we made money, if you help me out disregarding the losses" and the stock mkt goes up 5%. this has to be dumb money believing they are bottom fishing. my question is how long this joke is going to last till these guys realize that statements have very little substance. maybe a week?

"this has to be dumb money" or not dumb money at all expecting dumb money to follow through.

"Has anyone else noticed how the StreetEasy banner advertising has begun to seem a bit strange. "

sure, columbia medical center about sweaty hands and faces... that's as weird as it can get. somebody saw that article about academic pay that said that there's a dermatologist at columbia making $2 million a year? it gave me the feeling we are still a very affluent society.

"They desperately want to own and will believe anything that makes them feel as if they will. But in reality they will still be renting and posting the same cr-p here 10 yrs from now."

Or they'll wait out the very probable NYC RE crash, buy in at 50-70% down from peak, and be laughing their asses off at all the people on this board and elsewhere who kept uttering the delusional words to buy now in the midst of storm clouds so obvious, one has had to work hard to ignore them.

Optimists call realists pessimists. Pessimists call them optimists. Realists try to make calls based on data. Those that called this downturn have been proven right beyond the nightmares of optimists. I think a rally on news like Citibank shows a desperation for the old times, which are truly gone forever.

The realist advice - adjust to the new reality or lose out.

Citigroup today announced the best quarter since Q3 '07. Citi made $2.2B Q307 and took an $11B write off. So if Citi makes $8B-$10B in '09 (assuming no write-offs) we have a recovery?

http://money.cnn.com/2007/11/05/news/companies/citigroup_revision/?postversion=2007110510

Optimists always win in the end!! :)

I'm still trying to understand why uppereast has "anxiety" about his cash hoard -- are you one of those people keeping your money under your mattress?

uppereast if you really are a banker, wouldn't you be savvy enough to hedge your currency risk? That would alleviate some of your inflation worries as well. very interesting posts.

lol inflation. That's a good one.

Yes, you're right, the best thing to do with a "large pile of cash" in a deflationary environment is to stick it in a depreciating asset.

I think Mish's comment pretty much summed up this ridiculous announcement by a CEO that has zero credibility.

"So Citigroup has a profit, excluding what?

Who knows? Pandit did not say.

In other news, I am announcing I have $10 billion in my bank account except for the portion of the $10 billion I do not have."

Citigroup Will Have To Sell More Assets: Whitney
Topics:Banking
Sectors:Financial Services | Banks
By: CNBC.com | 10 Mar 2009 | 04:31 PM ET
Text Size

Citigroup will have to sell more of its assets to stay in business, well-known banking analyst Meredith Whitney told CNBC Tuesday.

Whitney made her comment after being asked about Citi's Chief Executive Vikram Pandit saying he was confident about the troubled bank's survival prospects.

Meredith Whitney

"Citi's capital position is stronger relative to how it was," said Whitney. "But I wouldn’t call it strong."

Whitney, who is founder of Meredith Whitney Advisors, said that the bank has exposures across the board and said that "I'm not optimistic about them."

"Trillions of dollars of loans have been mispriced by Citi", said Whitney. "By my math, they don’t make money in any of their businesses."

Whitney says Citigroup [C 1.45 0.40 (+38.1%) ] will be forced to sell their "crown jewels" if they are going to get any more bailout money from the government. "They're going to have a 'yard sale.' They will be a smaller and less of an international business going forward," says Whitney.

Citi split off its prized Smith Barney brokerage on Janury 13th.

Since October of last year, Citigroup has received two federal bailouts, $45 billion of capital from the Treasury Department's Troubled Asset Relief Program, and a government agreement to cap losses on $300.8 billion of troubled assets.

On the topic of keeping mark-to-market rules, Whitney said that it's basically a non-factor and that the damage has already been done. Whitney says that the banks don't want to have it suspended because if for some reason, the market comes back "they don’t get the benefit of the newer market."

Whitney also said that the government is trying to sweeten deals for the private sector in order to get more cash infusions into U.S. banks. "The government cannot do it alone," said Whitney. "They need the private sector to come back."

Whitney also commented on the credit card crisis she's been predicting. She said that credit cards are the next credit crunch and said that banks' portfolios continue to shrink and when you shrink the portfolios for the banks, "credit losses eat into earnings and they have to peddle faster to collect on loans and they make less money and lose money."

RELATED LINKS

Current DateTime: 01:33:25 10 Mar 2009
LinksList Documentid: 29619436

* Whitney: Credit Cards Next Crunch

Whitney revised her estimate for credit card line cuts to more than $2 trillion inside of 2009 and $2.7 trillion by end of 2010.

Whitney has previously said the credit line cuts would be $2 trillion by the end of 2010.

uppereast, "The point I am making is that banks are starting to make money again. I am not advising to buy Citi stock nor do I work there. All I said a couple of weeks ago was that my bank and some other banks are starting to make money again."

i asked you already but you didn't answer, possibly you didn't see my question. which business areas within the IB are actually showing better profitability?

"They desperately want to own and will believe anything that makes them feel as if they will. But in reality they will still be renting and posting the same cr-p here 10 yrs from now."

So, SteveF has to resort to insults now? And he's been 100% wrong and the truth is "crap".

I guess the era of the "bitter renter" is officially over... we're now well into the "bitter bubble buyer" phase...

Citi's CEO convienently forgot the March month - that's when the usual shhh hits the fan - writedowns LOL.

HT1 LOL? why would you be laughing at people's demise?

nyc10022...how about 100.1% wrong...:) admit it you're hoping for job losses because that means lower prices for you. That is f'd up.
prices on my studios are flat for the past year. That s-cks but is expected when most buyers screech to a halt. It always happens, then buyer anxiety subsides and buying begins. simple stuff. The economy seems to be gettng better from recent CEO comments. Buyers are revving their engines nyc10022, you will get run over as you should....

> nyc10022...how about 100.1% wrong...:) admit it you're hoping for job losses because that means
> lower prices for you. That is f'd up.

So, you're making up what I'm supposed to think, and then you're telling me that's f'ed up.

Man, SteveF, you really have problems.

> prices on my studios are flat for the past year.

And they won't be very flat for very long.

> Buyers are revving their engines nyc10022, you will get run over as you should....

SteveF, you claimed this before we went down 10%. And before we went down 20%. And before we went down 30%.

I don't get how everyone gets it except you... but... you have ABSOLUTELY NO FING CLUE.

You had no clue before, you have no clue now. You've been saying "here comes the bounce" for OVER A YEAR.

One more time for you.... FOUR YEARS. Yes, the bubble took FOUR YEARS to pop after the last stock market crash. And this is a bigger one.

Sorry, SteveF, but lying won't make it better.

You simply don't have a clue.

One more time... this is JUST TOO FUNNY...

"Looks like we've got a house full of bears...well then it's time to buy."

SteveF ONE YEAR AGO...
http://www.streeteasy.com/nyc/talk/discussion/3181-poll-whats-going-to-happen-to-re-market-in-ny

No clue then, no clue now.

Hey nyc10022, to paraphrase Cicero: 2005-2007 ARMs delanda est.