My last post was about how they’re arguing over the stress test results because they have the unglamorous job of polishing the world’s biggest turds and presenting them to the world as roses. Now listen to these two news stories.
Citigroup posted a $2.5 billion gain because of an accounting change adopted in 2007. Under the rule, companies are allowed to record any declines in the market value of their own debt as an unrealized gain.
That’s story #1, where Citi says “Yay we posted a profit too, see we all told you the bottom was in!”
Note the rapid rise in card NCLs. NCLs jumped from 8.04% in Q4 to 10.18% in Q1 2009.
Mortgage NCLs are rising sharply too.
The second graph shows the 90+ Days Past Due (DPD) trend for 1st and 2nd mortgages, and the Net Credit Losses.
The 90+ DPD is increasing rapidly for 1st mortgages – jumping from 5.71% in Q4, to 7.15% in Q1 2009.
Credit losses are still rising rapidly at Citi.
Their losses, percantage-wise, are “rising rapidly” and yet they’ve posted “a profit” thanks to account rules changes that let them book decreases in the dollar value of debt Citi owes (thanks to their ruination of the economy) as unrealized PROFIT!!1
I wish I could charge up a credit card, get it written off as bad debt and reduced to $0 and then claim thousands of dollars as profit. (I wonder if they’re going to have to pay any taxes on this “profit”… probably not.)
Tags: depression 2.0, no really we're really fucking fucked this time, total cockup, wasted money