A fun thing that banks do around earnings season is start nipping and tucking themselves, accentuating the good parts of their quarterly earnings and hiding the bad. This can be accomplished in many ways: by excluding so-called “onetime charges” that have no effect on core business trends, by futzing with things called CVA and DVA that are way too boring and complicated to explain so just read this if you’re interested, and by steering analysts and reporters to the best parts of their businesses and away from the clunker divisions.
In a stunning feat, Citigroup, which reported its third-quarter earnings this morning, managed to pull off all three.
Just look at this marvelous do-si-do of bad news avoidance, via The Wall Street Journal:
Citigroup’s profit tumbled 88% as the bank took a $4.7 billion writedown related to its stake in Morgan Stanley MS +0.92% Smith Barney and a large accounting hit tied to its own debt … Excluding the writedown and DVA, Citgroup said its net income was $3.3 billion, 27% higher than the third quarter 2011 … Excluding the DVA impact, net income in Citigroup’s Securities and Banking unit rose 67% to $1.6 billion from the year earlier period.
So, except for all the stuff we lost money on, we made money last quarter! High fives and Macanudos for everyone!
The background to today’s dismal earnings is that Citigroup has been, for several years, the big-bank equivalent of Pig-Pen, that guy from the Peanuts who was followed by a cloud of dirt everywhere he went. The bank got hit hard by the financial crisis and hasn’t gotten many breaks since. It has had executives sued (unsuccessfully) for mortgage fraud, had shareholders balk at its executive pay packages, been dragged into Libor-gate, and came out on the losing end of a tête-à-tête with Morgan Stanley over the valuation of their Smith Barney joint venture. Most alarming, its five-year stock chart looks like this:
(For comparison’s sake, BlackBerry-maker Research in Motion — by many accounts a nearly failed company — has essentially the same five-year losses, and it didn’t get a giant government bailout.)
In fairness to Citigroup, some parts of its business are going well. Revenue in the bank’s investment banking and fixed-income divisions were up over last year, and the bank says it gained “wallet share” (a horrible phrase that should never be used) “in all major products and in most regions.”
Still, with its stock price and its return on equity still in the Marianas Trench, having a marginally better quarter in certain areas (excluding DVA and the MSSB writedown and whatever else Vikram Pandit thinks shouldn’t count this quarter) is only a partial victory. Most days, in most ways, it’s hard to see any other conclusion: Four years after it took a giant bailout and nearly died anyway, Citigroup is still fairly Screwed.
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Isn’t this a rather important part of the job he was just nominated for?
Russia is excited that they’ve been totally vindicated by Mueller, which is definitely what the special counsel concluded
… “So, Mueller’s long-awaited report proved what was known in Russia from the very beginning: There was no collusion between Trump and any of his team with the Kremlin,” Konstantin Kosachev, a senator in Russia’s upper house of Parliament, said in a Facebook post on Monday.
“Two years of unceasing lies. Two years of the highest-level policy built on the allegation of collusion. A conspiracy explaining the allegedly pro-Russian position of Trump, because of which he was essentially forced to impose more and more stringent measures against our country.”
“That is why two years were not just lost for Russian-American relations, but simply crushing for them. Someone will answer for this damage? Someone apologize? Someone will adjust something?” Kosachev added.
The Christchurch massacre may have already inspired another hate crime
Local and federal law enforcement launched an investigation into an alleged arson attack at an Escondido, California, mosque early Sunday morning, where the suspect left behind a note referencing the terrorist attacks at two mosques in Christchurch, New Zealand, that killed 50 worshippers.
The fire broke out at 3:15 a.m. at Dar-ul-Arqam in what authorities are investigating as arson and a hate crime.
“If its an arson, it’s possibly a hate crime as well,” Escondido Police Department (EPD) Lt. Chris Lick said.
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New Zealand’s Egg Boy speaks
“I understand what I did was not the right thing to do,” Connolly [said].
“However, this egg has united people and, you know, money has been raised, tens of thousands of dollars have been raised for those victims.”
A GoFundMe to raise money for any legal fees Connolly may incur and to buy “more eggs” was set up shortly after the incident. The campaign has since raised close to $80,000, which the 17-year-old will donate to the victims of the terror attack.
“I’ve had one lady reach out to one of my friends in Christchurch and she said to me that throughout this period of darkness in her life was the one time since she smiled since the tragedy and that, I’m speechless,” Connolly told Macdonald.
Mueller reportedly considered speaking with Trump, which could have provided a lot of clarity on the obstruction of justice front
The special counsel’s office deliberated at length with Justice Department officials about issuing a subpoena for President Donald Trump to be interviewed, but ultimately the decision was made not to move forward with such a significant investigative step, according to a source familiar with the matter.
In the end, the decision to not make a formal request for a subpoena was critical, because that demand, should it have been rejected, would have been communicated by the attorney general to Congress, as the special counsel regulations mandate. Instead, a formal request from Mueller wasn’t made, allowing Barr to say in his letter to Congress on Friday “there were no such instances during the Special Counsel investigation” where Mueller was turned down.
More on the groundwork for the forthcoming legal battle over the Mueller report
For Republicans, the message from the Mueller report was clear and insistent - “The country needs to move on.” Meanwhile, Democrats immediately countered with “Release the whole Mueller report.” The struggle is now over which side wins that messaging war with the American public.
Democrats just as quickly noted that Mueller didn’t exonerate Trump on obstruction-of-justice charges either, a huge opening for them to go after the president. According to Mueller, “while this report does not conclude that the President committed a crime, it also does not exonerate him.” Democrats quickly demanded.
Speaker Nancy Pelosi (D-Calif.) and Senate Minority Leader Chuck Schumer (D-N.Y.) warned against drawing any conclusion from the findings, zeroing in on the fact that Mueller didn’t exonerate Trump over obstruction of justice. The Democratic leaders, like other Democrats on Sunday, also criticized Barr’s “public record of bias” against the special counsel’s probe, saying he’s “not a neutral observer and is not in a position to make objective determinations about the report.”
“And most obviously, for the president to say he is completely exonerated directly contradicts the words of Mr. Mueller and is not to be taken with any degree of credibility.”
The post-report hearings are about to begin
House Judiciary Committee Chairman Jerrold Nadler (D-N.Y.) said Sunday that his committee will call Attorney General William Barr to testify over “very concerning discrepancies and final decision making” at the Justice Department over special counsel Robert Mueller’s report.
“In light of the very concerning discrepancies and final decision making at the Justice Department following the Special Counsel report, where Mueller did not exonerate the President, we will be calling Attorney General Barr in to testify before @HouseJudiciary in the near future,” Nadler tweeted Sunday.
Barr wrote in the letter Sunday that the DOJ will spend the coming days identifying information in the Mueller report that cannot be publicly released, such as grand jury information and evidence from investigations that have to be referred to other offices, before making further decisions on how much of Mueller’s report can be released.
The self-sabotager-in-chief will find a way to make this more complicated for himself
A reluctant sigh of relief
Some wise words of caution on what we know
But crucially, Mueller reported that his investigation “did not establish that members of the Trump campaign conspired or coordinated with the Russian government in its election interference activities,” whether expressly or tacitly. To use the popular cable-news vernacular, Mueller did not establish “collusion.” (Never mind that collusion is not a legal term, and that the special counsel’s mission was to investigate “links and/or coordination” with the Russians.)
Trump’s triumphant supporters notwithstanding, we don’t yet know what that means. When prosecutors say that an investigation “did not establish” something, that doesn’t mean that they concluded it didn’t happen, or even that they don’t believe it happened. It means that the investigation didn’t produce enough information to prove that it happened. Without seeing Mueller’s full report, we don’t know whether this is a firm conclusion about lack of coordination or a frank admission of insufficient evidence. The difference is meaningful, both as a matter of history and because it might determine how much further Democrats in Congress are willing to push committee investigations of the matter.
Not in a chatty mood, surprisingly
Thank you, Ivanka
Yes, Trump is deeply concerned about the dignity of the office
This doesn’t seem like an unreasonable decision, based on what we know at the moment
What are you trying to say, Sean?
A reasonable request
A lot of Democrats sound like they’re spinning right now
He’s previously been so calm about this
The investigation was always a sideshow for the candidates running to replace Trump
Actually, the current Democratic message has very little to do with Russia