$7.2 billion in new write downs for Citi - are we there yet?
- 18.07.2008
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Citi posted a quarterly loss of $2.5 billion on $7.2 billion in fresh loan writedowns as the credit crunch continues unabated. Of course it was positioned as good news since the company lost twice as much money last quarter.
I’d like to take this opportunity at this point in the mortgage and credit crisis to suggest that any one calling bottom or the end of the crisis be either a) evaluated by a psychiatric professional b) tarred and feathered.
Consider the following news that I can’t spend time writing about today:
- Citi posts massive loan-related loss of $2.5 billion
- Merrill posts massive loan-related loss of $4.65 billion
- Freddie Mac is trying to raise $10 billion in fresh capital with a <$10 stock price
Things are not getting better folks, we are not at the bottom. If you say so you are either lying or have your head in the sand - both unaccpetable.
Happy Friday!
From the New York Times on Citi:
Citigroup said Friday morning that it lost $2.5 billion, or 54 cents a share, in the second quarter.
The loss was largely caused by $7.2 billion of write-downs of Citigroup’s investments in mortgages and other loans and by a weakness in the consumer market, which cost Citigroup $4.4 billion in credit losses and $2.5 billion to increase reserves. Analysts had expected a loss of 66 cent a share.
The bank has recorded more than $56 billion in credit losses and write-downs in the last four quarters. Citigroup lost more than $17 billion in that time. And its share price has fallen nearly 70 percent since the credit market began to tighten.
And Market Watch on Merrill:
Merrill Lynch & Co. reported a $4.65 billion second-quarter net loss late Thursday as the brokerage firm was hit by more write-downs on large mortgage-related exposures.
The firm also said it agreed to sell its 20% stake in Bloomberg LP back to the media company for $4.425 billion. It also plans to sell a controlling interest in its Financial Data Services unit, which has an enterprise value of more than $3.5 billion.Moody’s Investors Service downgraded Merrill to A2 from A1 after the results.
