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Kurt Kendis  

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  • Citigroup's Q3 Earnings: Surge Or Break Even? [View article]
    The 3Q12 published statements for Citi and all the big banks are (still) polluted with accounting items. You mentioned a few, but there are also litigation costs($350m), putback charges($150m), negative CVA/DVA hit($1.5b), and the MSSB transaction hits both OTTI and non cash earnings. There are more,and some offset (every back still releases reserves) so for all these companies 'fools rush in...'.
    Oct 9, 2012. 08:01 AM | 1 Like Like |Link to Comment
  • Citigroup Is Undervalued [View article]
    Chris....Citi is still impossible to value if you consider the items on the balance sheet that are legacy assets or liabilites with no currently available market, or the enormous number of items in the P&L that are a product of accounting policies and not core earnings.
    Aug 27, 2012. 07:48 AM | 1 Like Like |Link to Comment
  • Citigroup: Fed Should Let Citi Increase Dividend And Buy Back Stock [View article]
    Superficial analysis of large financial institutions is an opacity trap. You have to dig in and do the work to try to uncover the strange and very material items in the statements that are either hard to value (Citi holdings) or non core accounting items. To ignore CVA/
    CVA/DTA, litigation, complex impairment accounting, and the miriad of contingencies each quarter, even if they net, will eventually lead to tears.
    Aug 2, 2012. 08:32 AM | Likes Like |Link to Comment
  • Mega Banks Must Shrink: Great For The Country, Better For Shareholders [View article]
    One of these arguements where everyone is correct! The giant banks must rightsize on a)scale b) complexity, and c) opacity. The accounting is not transparents since it is still dominated by material and sometimes wierd accounting nuances (DVA is best example), but the complexity is making the valuation problematic. Translation: there are many reasons to discount the large financial institutions until all the effects of a decade of excessive scale complexity and opacity are worked out (or regulated out) of the system.
    Jun 19, 2012. 09:57 AM | 1 Like Like |Link to Comment
  • Vikram Pandit's Clever Idea [View article]
    Three comments: First, your suggested probes do not go deep enough -- the denominator is important as well , so policies on OTTI, and reoriginations, and 'amend and extend', and TDR's should also be revealed as they are rarely in the notes in a clear fashion. Second, two tools that the industry fears should be included -- continuous audit and electronic discovery. Both would be a window towards transparency, at least until the next generation of opacity tricks. Third, there is another source of information that may well be the best, although late -- the whistleblower. However I agree with you -- keep the concept alive.
    Jan 12, 2012. 06:34 AM | Likes Like |Link to Comment
  • Regulatory Failure Datapoint Of The Day: Citigroup Edition [View article]
    Felix...your timing is interesting...same morning as David Brooks' NYT piece on how nothing ever gets repaired. Are the moon and stars aligning??
    “The real lesson from financial crises is that, at the pit of the crisis, you do what you have to do. You bail out the banks. You bail out the weak European governments. But, at the same time, you lock in policies that reinforce the fundamental link between effort and reward. And, as soon as the crisis passes, you move to repair the legitimacy of the system.....
    That didn’t happen after the American financial crisis of 2008."
    Dec 3, 2011. 06:35 AM | 1 Like Like |Link to Comment
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