Friday April 18, 2008, 8:29 pm
Analysts call it a "kitchen sink quarter." Companies in shell-shocked industries write down everything that even looks like it might go wrong, clearing the balance sheet for future growth. For banking, that quarter was supposed to be the end of last year. Friday's earning report from Citibank, however, indicates that some in the industry might still have faulty plumbing yet to expose. After giant write-downs last quarter, Citibank again announced it needed to revalue its assets sharply downward. The financial giant took massive write-downs across multiple business lines, pushing revenue into negative territory and causing its second consecutive quarterly loss. The bank has now written down almost $40 billion due to the credit crunch.


The bank's woes offer snapshots of emerging trends. Its net interest margin -- the difference between its borrowing costs and its lending costs -- actually rose in the first quarter of 2007, thanks to cheap funds from the Federal Reserve. Nonetheless, the attempt to deleverage as quickly as possible cost dearly. Banking may be the only industry in which a CEO could proudly announce that "taken over the last two quarters, assets are down nicely." Fitch has cut the company's credit rating over concerns about the loss, and its future profitability.

Citigroup's own view of its profitability seems hardly more optimistic. The loans underlying many of its businesses are actually still performing above what the price of the securities would imply -- the bank actually reports that 90-day credit-card delinquencies are down slightly from the same period last year. Similarly, in the subprime market, delinquencies are still well under 20%, not quite a financial Armageddon. But everyone is waiting for disaster, and pricing accordingly. Citibank's current focus is on bringing down its leverage and cutting expenses, reflecting a general belief on Wall Street that there are still hard times ahead. Banks may be watching their investments go down the drain for quite a while.

Sunday April 20, 2008, 6:39 pm
To take attention away from our lying,invading and murdering to rob Iraq, the empire will crash the economy.

The next question is, how can we have poverty in a country where only 300 million americans are producing 12-17 trillion dollars in annual wealth ?

Why are the thieves not in Jail ?

Saturday May 3, 2008, 3:43 pm
Elizabeth Warren on The Coming Collapse of the Middle Class. And she's got the facts and figures. And charts. Some of this will amaze you. (The intro lasts about five minutes, if you want to skip ahead.)