Posted on 03/10/2009 4:30:44 PM PDT by Grim
NEW YORK (Fortune) -- Citigroup chief executive officer Vikram Pandit is nothing if not an optimist.
Shares of his big bank soared as much as 27% early Tuesday after reports circulated about a memo Pandit sent employees Monday night that extolled Citi's virtues. In the memo, obtained by CNN Tuesday, Pandit said the troubled bank, which has already received $45 billion in government assistance, was profitable during the first two months of 2009.
Investors have been wondering if surging loan losses will lead to a fourth round of federal aid that could wipe out common shareholders and perhaps lead to a management change.
Late last month, the government agreed to convert some of the preferred shares it owns in Citi (C, Fortune 500) to common stock, a move that could give taxpayers up to a 36% ownership stake in the bank.
But even with Citi shares hovering just above a dollar each, Pandit insists he is dealing from a position of underappreciated strength.
"In addition to our strong capital position, I am most encouraged with the strength of our business so far in 2009," Pandit said in the memo. "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."
Of course, that's not saying much. Since that quarter, Citi has lost $28.5 billion, as the company has been forced to write down the value of money-losing bond market and derivatives bets.
(Excerpt) Read more at money.cnn.com ...
I thought some forms of communication from a publicly held corporation were regulated....
Not when you have the US government as your partner. :’)
This was in a "letter to his employees," which he obviously leaked to the press. Later on in the letter, he admits that all these newfound profits were delivered by the tooth fairy.
SEC filings etc., of course, are actionable if they are intentionally fraudulent.
Cunning use of disinformation.
They do have tremendous earning power in their core businesses, not to mention many unnecessary employees they could get rid of.
They’ve also been ditching undesirable customers for months now.
As for the toxic assets, mark-to-market probably understates their long-term value. While you can hardly get 22 cents on the dollar for a pool of whole mortgages, it is not the case that the value of houses has declined 78%. Sales in California show that when the price drops 40-50%, buyers appear.
Stock markets plummet...bank insolvency is a major factor..
Citi gets multiple tax payer bailouts...eventually government is a majority stake holder...
Obama gets beat down in the press and by supposed stock market gurus about his ineffective policies leading to the markets crash...
After another brutal day in the markets (Tuesday March 9) a memo surfaces out of no where overnight and the markets jump upward..Citi goes up 27% in 1 day....
Hmmmmm.....nah....nothing strange here...where's that Rush Limbaugh fella...he's the grand pooba of the Republican party....he say anything controversial today???
He even supported Lazio against Hitlery.
Is he desperately trying to avoid nationalization with these announcements?
If this is debunked in the blogosphere tonite..then the market may tank again tomorrow.
With all the evidence to the contrary they take a rumor, a leaked letter, or practically anything as cause for a run up for day. Then, next day, back to falling, falling, falling. Usually falling more in the next two or three days more than it gained after the last stampede.
Just doesn't seem to me like a very good place to be putting one's confidence, spelled m-o-n-e-y, right now.
Just being a clod-kicking rube, why do I keep having to lower my expectations whenever I meet a suit from New York City?
Not all parts of California. I'm looking about two hours outside of Silicon Valley; I've missed three in the past two months that sold at about a 70% discount from their bubble tops. High $600's to very low $200's, and maybe half of that loss was in the past year.
It was debunked before the market opened. The press grabbed the “money quote” from the first paragraph and was very careful to pretend the “except for all the losses” stuff a couple of millimeters later.
This was just an excuse to run the markets up today.
James Taggart lives...
The problem is leverage. If you borrow the money 20 to 1, a 5% loss wipes you out.
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