Seeking Alpha

James Quinn's  Instablog

James Quinn
Send Message
James Quinn is a senior director of strategic planning for a major university. James has held financial positions with a retailer, homebuilder and university in his 25-year career. Those positions included treasurer, controller, and head of strategic planning. He is married with three boys and... More
My blog:
TheBurningPlatform.com
  • HOLY COW!! CITICORP WINS THE FRAUD AWARD 4 comments
    Jul 16, 2010 9:56 AM

    Our favorite zombie bank, Citicorp, has outdone themselves this quarter. They are true magicians and win the prize for biggest quarterly fraud ever. It appears that old Vikrim Pandit would like you to believe that despite revenue falling from $30 billion to $22 billion (for those mathematically challenged Wall Street stock analysts - a 27% PLUNGE) he managed to pull a $2.7 billion profit out of his hat. Amazing. He must have implemented new efficiency measures, cut bonuses, trimmed a little fat, and used his vast trading knowledge to bilk a few state pension funds out of a few billion in fees. 

    But no. He fell back on the oldest trick in the book, signed off by his friendly well compensated auditors. He made an accounting entry to produce his profit. Isn't that creative? Despite all indications that the economy has gone into phase two of the Greater Depression, Mr. Pandit decided to REDUCE his loan loss provision by $5.7 billion. For those that have trouble adding and subtracting (government bureaucrats & Wall Street stock analysts) here is the truth of Citicorp's results:

    Citicorp reported profit                      $2.7 billion

    Reduction in loan loss provision        $5.7 billion

    Citicorp REAL Result                         $3.0 billion LOSS

    But don't worry, their result beat earnings estimates. Let's party. Worry about the future taxpayer bailout later.



    Disclosure: No Position
Back To James Quinn's Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (4)
Track new comments
  • Tom Au, CFA
    , contributor
    Comments (6783) | Send Message
     
    (Bank) loan loss provisions are among the biggest lies around.
    16 Jul 2010, 10:07 AM Reply Like
  • Erik McCurdy
    , contributor
    Comments (318) | Send Message
     
    And the game continues. The really scary thing is that many folks only glance at headline numbers. Those people are, of course, the targets of these little accounting manipulations. It will be interesting to see how creative they get over the next several quarters as things deteriorate meaningfully.
    16 Jul 2010, 10:14 AM Reply Like
  • The_Hammer
    , contributor
    Comments (4298) | Send Message
     
    And this all allowed by our regulators. The entire political and financial system is broken.
    16 Jul 2010, 10:27 AM Reply Like
  • MPT failed
    , contributor
    Comments (268) | Send Message
     
    1st paragraph from Bloomberg article:

     

    What Citigroup Inc. (C) has always needed is a leader who will be straight about the company’s finances, without spinning the facts. For that reason, the departure of Vikram Pandit as chief executive officer is progress.
    17 Oct 2012, 05:20 PM Reply Like
Full index of posts »
Latest Followers

StockTalks

More »

Latest Comments


Posts by Themes
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.