Comments on: How Messed Up is Citi? http://www.nakedcapitalism.com/2007/11/how-messed-up-is-citi.html Mon, 23 Nov 2009 10:17:20 -0500 http://wordpress.org/?v=2.8.4 hourly 1 By: Anonymous http://www.nakedcapitalism.com/2007/11/how-messed-up-is-citi.html#comment-1433 Anonymous Tue, 06 Nov 2007 04:34:00 +0000 http://www.nakedcapitalism.com/2007/11/how-messed-up-is-citi/#comment-1433 When you say "messed up", you're of course narrowly refering to their exposure to the credit crunch. But on a more general note, from <a HREF="http://www.ft.com/cms/s/0/8559769c-8b40-11dc-95f7-0000779fd2ac.html" REL="nofollow">today's <i>Financial Times</i></a>:<br/><br/><i><br/>According to one Citi investor, the board's reluctance to oust Mr Prince before now partly reflects "their gratitude that he kept everyone out of jail".<br/></i> When you say “messed up”, you’re of course narrowly refering to their exposure to the credit crunch. But on a more general note, from today’s Financial Times:


According to one Citi investor, the board’s reluctance to oust Mr Prince before now partly reflects “their gratitude that he kept everyone out of jail”.

]]> By: Anonymous http://www.nakedcapitalism.com/2007/11/how-messed-up-is-citi.html#comment-1429 Anonymous Mon, 05 Nov 2007 21:40:00 +0000 http://www.nakedcapitalism.com/2007/11/how-messed-up-is-citi/#comment-1429 Yves looks like you were right about total off sheet exposures, but SIVs only a part, and smallest exposures, though n.b. they have ' provided liquidity to the SIVs at arm's-length commercial terms totaling $10 billion of committed liquidity, $7.6 billion of which has been drawn as of October 31, 2007. Citigroup will not take actions that will require the Company to consolidate the SIVs'<br/><br/><br/><br/><br/>The following table represents the carrying amounts and classification of consolidated assets that are collateral for VIE obligations, including VIEs that were consolidated prior to the implementation of FIN 46-R under existing guidance and VIEs that the Company became involved with after July 1, 2003: <br/><br/>In billions of dollars Sept. 30,2007 <br/>Cash................................1.7<br/>Trading acct assets..........24.5<br/>Investments....................27.0<br/>Loans..............................9.5<br/>Other assets....................4.2<br/> <br/>Total assets <br/>consolidated VIEs.............66.9<br/><br/>The following table represents the total assets of unconsolidated VIEs where the Company has significant involvement: <br/> <br/>ABCP conduits.................73.3<br/>SIVs................................83.1<br/>Other vehicles.................27.0<br/>CDOs..............................84.2<br/>Mortgage-related.............11.9<br/>TRUPS............................11.7<br/>Structured finance/other.52.2<br/> <br/> <br/>Total assets <br/>unconsolidated VIEs........343.4<br/><br/><br/>The Company's maximum exposure to loss as a result of its involvement with VIEs that are not consolidated was $141 billion and $109 billion at September 30, 2007 and December 31, 2006, respectively. For this purpose, maximum exposure is considered to be the notional amounts of credit lines, guarantees, other credit support, and liquidity facilities, the notional amounts of credit default swaps and certain total return swaps, and the amount invested where Citigroup has an ownership interest in the VIEs. This maximum amount of exposure bears no relationship to the anticipated losses on these exposures. <br/><br/>Maximum Exposure <br/>In billions of dollars September 30,2007 <br/> <br/>ABCP Conduits..................69 <br/>SIVs..................................3<br/>CDOs...............................43<br/>Other structured fin.........26<br/> <br/>Total..............................141 Yves looks like you were right about total off sheet exposures, but SIVs only a part, and smallest exposures, though n.b. they have ‘ provided liquidity to the SIVs at arm’s-length commercial terms totaling $10 billion of committed liquidity, $7.6 billion of which has been drawn as of October 31, 2007. Citigroup will not take actions that will require the Company to consolidate the SIVs’

The following table represents the carrying amounts and classification of consolidated assets that are collateral for VIE obligations, including VIEs that were consolidated prior to the implementation of FIN 46-R under existing guidance and VIEs that the Company became involved with after July 1, 2003:

In billions of dollars Sept. 30,2007
Cash…………………………..1.7
Trading acct assets……….24.5
Investments………………..27.0
Loans…………………………9.5
Other assets………………..4.2

Total assets
consolidated VIEs………….66.9

The following table represents the total assets of unconsolidated VIEs where the Company has significant involvement:

ABCP conduits……………..73.3
SIVs…………………………..83.1
Other vehicles……………..27.0
CDOs…………………………84.2
Mortgage-related………….11.9
TRUPS……………………….11.7
Structured finance/other.52.2

Total assets
unconsolidated VIEs……..343.4

The Company’s maximum exposure to loss as a result of its involvement with VIEs that are not consolidated was $141 billion and $109 billion at September 30, 2007 and December 31, 2006, respectively. For this purpose, maximum exposure is considered to be the notional amounts of credit lines, guarantees, other credit support, and liquidity facilities, the notional amounts of credit default swaps and certain total return swaps, and the amount invested where Citigroup has an ownership interest in the VIEs. This maximum amount of exposure bears no relationship to the anticipated losses on these exposures.

Maximum Exposure
In billions of dollars September 30,2007

ABCP Conduits………………69
SIVs…………………………….3
CDOs………………………….43
Other structured fin………26

Total…………………………141

]]> By: Anonymous http://www.nakedcapitalism.com/2007/11/how-messed-up-is-citi.html#comment-1425 Anonymous Mon, 05 Nov 2007 17:02:00 +0000 http://www.nakedcapitalism.com/2007/11/how-messed-up-is-citi/#comment-1425 This forthcoming adoption of FASB 157 on NOV 15 will be very interesting. This forthcoming adoption of FASB 157 on NOV 15 will be very interesting.

]]> By: Anonymous http://www.nakedcapitalism.com/2007/11/how-messed-up-is-citi.html#comment-1424 Anonymous Mon, 05 Nov 2007 17:01:00 +0000 http://www.nakedcapitalism.com/2007/11/how-messed-up-is-citi/#comment-1424 This forthcoming adoption of FASB 157 on NOV 15 will be very interesting. This forthcoming adoption of FASB 157 on NOV 15 will be very interesting.

]]> By: Gavin http://www.nakedcapitalism.com/2007/11/how-messed-up-is-citi.html#comment-1423 Gavin Mon, 05 Nov 2007 14:20:00 +0000 http://www.nakedcapitalism.com/2007/11/how-messed-up-is-citi/#comment-1423 How many times does Citi need to be bailed out in its entirety before the world is rid of their incompetence?<br/><br/>Everyone knows the old adage - fool me once, shame on you.. fool me twice, shame on me. This is Citi's second time drawing the wool over our eyes.. anyone who claims Citi's need of a bailout was "unforeseeable" is simply a stupendously bold lie.<br/><br/>BK their entire institution, drop every SIV they're backstopping to zero, and move forward. Enron accounting techniques must be forced to end, and if the stuffed head of Citigroup mounted on the wall of the SEC is what that will take.. then let's get to it. How many times does Citi need to be bailed out in its entirety before the world is rid of their incompetence?

Everyone knows the old adage – fool me once, shame on you.. fool me twice, shame on me. This is Citi’s second time drawing the wool over our eyes.. anyone who claims Citi’s need of a bailout was “unforeseeable” is simply a stupendously bold lie.

BK their entire institution, drop every SIV they’re backstopping to zero, and move forward. Enron accounting techniques must be forced to end, and if the stuffed head of Citigroup mounted on the wall of the SEC is what that will take.. then let’s get to it.

]]> By: Anonymous http://www.nakedcapitalism.com/2007/11/how-messed-up-is-citi.html#comment-1421 Anonymous Mon, 05 Nov 2007 11:28:00 +0000 http://www.nakedcapitalism.com/2007/11/how-messed-up-is-citi/#comment-1421 I wonder, every time I read about some bank's exposure to subprime, it's almost always (much) more AAA or even super-senior than lower tranches.<br/>Who does own all these lower tranches? I wonder, every time I read about some bank’s exposure to subprime, it’s almost always (much) more AAA or even super-senior than lower tranches.
Who does own all these lower tranches?

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