Citigroup’s Accounting and Najib’s Political Creativity
Let's clear the confusion on this company called Citigroup Inc. which suddenly attracted all the cheers from the trading floor because the financial giant had done something extraordinary and awesome – it made money.
However I thought you should know the creative accounting behind this great story although I believe many saw through it judging from the stock price that plunged almost 9% after it gapped up right after the earnings result. This is the same way the current Najib’s administration desperately trying to save his day via creative political game.
First of all there’s nothing wrong to celebrate Citigroup’s latest result because the institution was ailing with losses and had consumed three bailouts from Washington costing $45 billion of taxpayer money. You may call it smokescreen or an attempt to create an impression that U.S. banks (together with Wells Fargo & Co, JPMorgan Chase & Co and Goldman Sachs Group Inc.) are stabilizing and recovering so that investors will start pouring their money in them thus minimizing the need for more taxpayer money (or rather bailouts). Citigroup posted its first profitable quarter in 18 months mainly because traditionally first quarter was a busy quarter with huge business transactions.
