> http://www.bloomberg.com/apps/news?pid=20601087&sid=a6My3P.WwqPs&refer=home
> "Citigroup Profit Exceeds Estimates on Trading Gains"
They claimed they made $1.6 billion. Did they? Read on:
> Citigroup posted a $2.5 billion gain from accounting rules that
> allow companies to profit when their own creditworthiness declines.
> The rules reflect the possibility that a company could buy back its
> own liabilities at a discount, which under traditional accounting
> methods would result in a profit.
> Citigroup already is benefiting from the Financial Accounting
> Standards Board’s decision earlier this month to ease rules that
> forced banks to write down assets whose market value had been
> depressed so long their impairment was no longer considered
> “temporary.” That rule change reduced impairment charges by $631
> million on a pretax basis, the bank said."
But wait, there's more:
> The quarter’s results included a $250 million gain from
> releasing reserves that previously had been set aside for
> potential litigation expenses, Citigroup said. The bank also booked
> a $110 million tax benefit related to the “resolution of certain
> issues” in an Internal Revenue Service audit.
$2.5 billion + $631 million + $250 million + $110 million = a $3.491 billion boost to quarterly profits. Thanks, Uncle Sam!
-- DRR