Filed under: Earnings reports, Forecasts, Bad news, Citigroup Inc. (C)

Bloomberg News reports a blizzard of bad news about Citigroup (NYSE: C). Its management team does not know what’s going on with its Collateralized Debt Obligation (CDO) portfolio, and loan losses on the consumer side of its business are climbing fast.

I am most concerned about Citi’s inability to quantify the CDO damage. According to DealBreaker, the conference call did not go well, with Citi’s CFO “having to admit many times that he either wouldn’t comment or didn’t know the answer to detailed questions about credit market exposure. Merrill’s Gary Moskowitz asked about what the original par value of the CDO portfolio. Crittenden said he didn’t know. How about specifics on modeling versus market tests? Nope, just more hand-waving!”

Another analyst, Jon Fisher, who helps manage $22 billion at Minneapolis-based Fifth Third Asset Management said, “There are probably issues on their balance sheet that the management team, who’s only really been running the company for about a month, doesn’t even know about.”

Continue reading Citigroup’s bad news: Banks’ worst period since Great Depression?

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This entry was posted on Tuesday, January 15th, 2008 at 11:55 pm and is filed under Stocks Money News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.