I was cruising down I-80 when it came to me that the last time I had seen the lap top was atop the kitchen island not resting comfortably in the back seat. Just like last year it had been left at home. Turning to Trouble and Strife I never even got the first word out when a curt, "Don't even TRY to go there," hit me. I know that tone; it was my fault anyway so I didn't even try to lay off some of the blame. It could have gotten ugly at 75MPH.
Shame is I missed a pretty good week of stories. The big news on the banking front was the agreement among the regulators to establish new primary capital rules for the larger banking institutions at 5%, putting the U.S. banks at a higher level than their European counterparts as well as being somewhat at a disadvantage as to the assignment of risk as to assets. The Euros continue to regard sovereign risk in the Euro zone as having a risk weighting of 0 whereas U.S. banks only enjoy that concept in regard to full faith and credit U.S. debt. Somehow, I seem to think there is a difference in value between Greece and Germany but our Euro brothers and sisters do not.
Now most of the larger institutions can already point to acceptable capital levels or plans that will get them there in a relatively short period of time, but what troubles me, as I continue to point out over and over, is that capital in the sense of which the regulators are speaking, can be important when the Second National Bank of Boot Hill's loan to Farmer Brown goes in the gurgle tube because it didn't rain this year, but doesn't mean a damn thing to J.P. Morgan if all the liquidity in the system dries up: banks get sick on the asset side but die on the liability side…those that count, that is. With all respect to Boot Hill, it doesn't count. So, we have all these fine people in D.C. and Billy the Dud patting themselves on the back when in fact they have done absolutely nothing to improve the system in any way that counts for those among their charges who do count. A round of applause and let us move on.
Citicorp got another piece bad news last week as it was announced that the Federal A.G. in Massachusetts was opening an investigation of money laundering involving their affiliate--once removed--BANAMEX of California. Hummmm. Tarullo deciding that his boys' algorithms work better than all those which had mutually been agreed and now another Massachusetts-based entity jumping up ugly at the Pinata that is/will become Citicorp? Why, you ask? Could it be political cover? Could it be Crazy Lizzy organizing this entire thing? Get good odds from me that it is. I don't believe in coincidences. It is so transparent it is ridiculous, but of course the deaf and dumb media just will not pick it up. As a repost, Citicorp today reported far better than expected operating results and a great improvement in their balance sheet which had the effect of giving a big boost to the stock market at least in the short term. Good on ya, mates.
Finally, Greece announced an immensely sucessful 5 year bond issue of over 3 Billion Euros yielding just under 5%. Coverage was nearly 4X. Remarkable. This morning, the Governor of the Banque de France announced that the Euro Crisis is mostly behind us. Oh good, I was waiting for that. I am also waiting to be told that the Russians have not invaded the Eastern portion of the Ukraine and the Ukrainians will not fight as a proud people will do from time to time. Just a few more events that alter and illuminate our time…and my lap top was in the kitchen. Think I'm getting old?
Showing posts with label Citicorp. Show all posts
Showing posts with label Citicorp. Show all posts
Monday, April 14, 2014
Tuesday, April 1, 2014
CONTINUATION AND EXPLArNATION
It wasn't an hour after I posted yesterday when I got a call from He Who Knows All Things.
"Better explain that better."
"Did I get it wrong?"
"I don't think so but I would bet that some of your readers don't know how something like this could happen or the real story behind the scenes in addition to what you laid out, naughty boy."
As usual he's right so with apologies is a bit more insight into the goings-on in today's regulating mess.
Citicorp has, on any one day, over 300 regulators inside of the institution. Their job is, of course, to get a handle on the operations of the institution in regard to compliance and risk management among other thing. I don't know how good they are but I suspect they are quite good as the staff of the New York Fed has always been first rate; it's only when one gets into the top brackets and the politics comes out do we have trouble.
You can bet the mortgage on the fact that the regs in NYC and Citicorp were pretty much on the same page. There is a constant back and forth as to what the Fed wants to see both as a result and how it is achieved. As I said yesterday, with so much at stake it is unimaginable that the CEO of the corporation would be off visiting clients half way around the world if he had been unsure of the outcome. The regulators are practical guys; they know and understand the businesses and the "clients" vision of the same.
Danny Boy and his guys do not. They understand Wells Fargo which takes deposits, makes loans and writes mortgages…all in the good ol' U.S. of A. It is the simplest form of banking today if any of the business is simple. And you know what? In a sense J.P. Morgan is more like Wells than it is Citi as are most if not all of the other banks in the stress test. So when Danny Boy and his quant guys write their programs, they are going to be a hell of a lot more accurate as applied to Wells than Citi. And when your really don't understand the businesses you are evaluating…What's that you ask? Was there an internal disagreement at the Fed? Yep, and Danny Boy won, not because of right but because of might. One size fits all apparently and to hell with anybody else. We will hear more of this of course but for now if you think the supervision of financial institutions has improved, think again.
Tomorrow (perhaps) we will take a look at one of the subjects of last week's clam bake, to wit: what have we learned in the past 30 years. I think you will enjoy it.
"Better explain that better."
"Did I get it wrong?"
"I don't think so but I would bet that some of your readers don't know how something like this could happen or the real story behind the scenes in addition to what you laid out, naughty boy."
As usual he's right so with apologies is a bit more insight into the goings-on in today's regulating mess.
Citicorp has, on any one day, over 300 regulators inside of the institution. Their job is, of course, to get a handle on the operations of the institution in regard to compliance and risk management among other thing. I don't know how good they are but I suspect they are quite good as the staff of the New York Fed has always been first rate; it's only when one gets into the top brackets and the politics comes out do we have trouble.
You can bet the mortgage on the fact that the regs in NYC and Citicorp were pretty much on the same page. There is a constant back and forth as to what the Fed wants to see both as a result and how it is achieved. As I said yesterday, with so much at stake it is unimaginable that the CEO of the corporation would be off visiting clients half way around the world if he had been unsure of the outcome. The regulators are practical guys; they know and understand the businesses and the "clients" vision of the same.
Danny Boy and his guys do not. They understand Wells Fargo which takes deposits, makes loans and writes mortgages…all in the good ol' U.S. of A. It is the simplest form of banking today if any of the business is simple. And you know what? In a sense J.P. Morgan is more like Wells than it is Citi as are most if not all of the other banks in the stress test. So when Danny Boy and his quant guys write their programs, they are going to be a hell of a lot more accurate as applied to Wells than Citi. And when your really don't understand the businesses you are evaluating…What's that you ask? Was there an internal disagreement at the Fed? Yep, and Danny Boy won, not because of right but because of might. One size fits all apparently and to hell with anybody else. We will hear more of this of course but for now if you think the supervision of financial institutions has improved, think again.
Tomorrow (perhaps) we will take a look at one of the subjects of last week's clam bake, to wit: what have we learned in the past 30 years. I think you will enjoy it.
Monday, March 31, 2014
A SINGLE VIEW
Daniel Tarullo is an arrogant, pretty much useless jerk that never had a real job in his life. Oh, that is not to say he is stupid…far from it. He's just a graduate of Georgetown and Harvard Law who taught at both places, was appointed a Governor of the Federal Reserve in 2009 but is an arrogant, useless jerk.
He wanted to to the Secretary of the Treasury but was more disliked than Larry Summers (and no where near as smart I suspect). That job went to Jacob/Jack who is no where near as smart as either of them…I suspect. Lately, he has wanted to become the Vice Chairman but that job of course is going to Stan Fisher who is smarter than all of them and a sweetheart of a guy. So Daniel Tarullo and his ego is one pissed off guy and is kind of stuck in the job of the head of regulation and supervision which he wrestled away from the New York Fed primarily because Billy the Dud is totally useless and allowed him to walk away with it. And now Danny Boy is going to make his bones.
You see, way back when, that is when he didn't make it at Harvard, Danny Boy decided that politics might be the best path to ego fulfillment and he joined the staff of Teddy Kennedy. Danny Boy ran a bunch of wacko left wing stuff for Teddy and won well-earned support. Who's his Rabbi now? Well of course it's Crazy Lizzy Warren from the Bay State. They have one very important thing in common: knowing nothing about banks they both hate them.
I got to New York on Wednesday and all people were talking about was the Fed's failing grade given to Citicorp in the "stress test." This was supposed to be a test of capital adequacy during various doomsday scenarios but what most people missed is that this go-around could be decided on either objective or subjective basis. What is a "subjective basis?" Who the hell knows. But here's a comparison: in 2007/08 Bear Stearns, a slop shop, got bailed out and sold to J.P. Morgan (too bad Jamie). Lehman which was a serious player got tanked because everyone was pissed of at Dick Fuld who ignored every piece of advice and directive he received from his regulators. That's subjective.
In the present time, everybody was after J.P Morgan and Eric Holder and his blackmail gang got there first. That got Danny Boy in an even fouler mood: enter Citigroup.
Citicorp was not ignoring suggestions made by regulators. Citicorp was absolutely convinced that they had complied with what the Fed was looking for. The people who run Citicorp and the bank are very, very smart people. Now ask yourself; if these guys had not been so confident, would their CEO have planned to be half way around the world on the day they knew the announcement was to be made? Of course not. The decision to deny Citicorp's plan was Danny Boy's. It was on Citicorp that he made his bones (or so he thinks). His little cabal on the Board went along with him as did Billy the Dud (you know, after this, "dope" might be a better connotation) but he was him and done at the last minute. Rumor has it--and I have been unable to confirm this--the Citicorp was given less than 5 minutes notice before the public was informed. If you're about to be whacked in the Organization, you're given longer to pray.
Why? Here's my view. Citi is big. Citi is an easy target, but in addition, Citi is unlike the other TBTF banks. Citi is the only international bank in the bunch. Citi's funds transfer business is monumental and complex; Citi's most profitable entity is Banco Nacional de Mexico; BANAMEX's funds transfer business just out of IT'S subsidiary in California--Mexican workers sending money home to their families--is huge and the bank was subject to a fraud that cost Citi $250 million. Danny Boy doesn't like that kind of goings-on because Danny Boy like a great deal of the rest of the stuff he is regulating doesn't understand it. Subjective decision, and screw the shareholders.
Tarullo has been there for 5 out of an 8 year term. If Ms. Yellen has a brain in her head, she'll get him the hell out of there now. What this fool has almost done is to destroy Citicorp's public image and trust which in so doing lays a path for the beginning of a TBTF test. He's playing with lives here. It's time some adults got involved.
He wanted to to the Secretary of the Treasury but was more disliked than Larry Summers (and no where near as smart I suspect). That job went to Jacob/Jack who is no where near as smart as either of them…I suspect. Lately, he has wanted to become the Vice Chairman but that job of course is going to Stan Fisher who is smarter than all of them and a sweetheart of a guy. So Daniel Tarullo and his ego is one pissed off guy and is kind of stuck in the job of the head of regulation and supervision which he wrestled away from the New York Fed primarily because Billy the Dud is totally useless and allowed him to walk away with it. And now Danny Boy is going to make his bones.
You see, way back when, that is when he didn't make it at Harvard, Danny Boy decided that politics might be the best path to ego fulfillment and he joined the staff of Teddy Kennedy. Danny Boy ran a bunch of wacko left wing stuff for Teddy and won well-earned support. Who's his Rabbi now? Well of course it's Crazy Lizzy Warren from the Bay State. They have one very important thing in common: knowing nothing about banks they both hate them.
I got to New York on Wednesday and all people were talking about was the Fed's failing grade given to Citicorp in the "stress test." This was supposed to be a test of capital adequacy during various doomsday scenarios but what most people missed is that this go-around could be decided on either objective or subjective basis. What is a "subjective basis?" Who the hell knows. But here's a comparison: in 2007/08 Bear Stearns, a slop shop, got bailed out and sold to J.P. Morgan (too bad Jamie). Lehman which was a serious player got tanked because everyone was pissed of at Dick Fuld who ignored every piece of advice and directive he received from his regulators. That's subjective.
In the present time, everybody was after J.P Morgan and Eric Holder and his blackmail gang got there first. That got Danny Boy in an even fouler mood: enter Citigroup.
Citicorp was not ignoring suggestions made by regulators. Citicorp was absolutely convinced that they had complied with what the Fed was looking for. The people who run Citicorp and the bank are very, very smart people. Now ask yourself; if these guys had not been so confident, would their CEO have planned to be half way around the world on the day they knew the announcement was to be made? Of course not. The decision to deny Citicorp's plan was Danny Boy's. It was on Citicorp that he made his bones (or so he thinks). His little cabal on the Board went along with him as did Billy the Dud (you know, after this, "dope" might be a better connotation) but he was him and done at the last minute. Rumor has it--and I have been unable to confirm this--the Citicorp was given less than 5 minutes notice before the public was informed. If you're about to be whacked in the Organization, you're given longer to pray.
Why? Here's my view. Citi is big. Citi is an easy target, but in addition, Citi is unlike the other TBTF banks. Citi is the only international bank in the bunch. Citi's funds transfer business is monumental and complex; Citi's most profitable entity is Banco Nacional de Mexico; BANAMEX's funds transfer business just out of IT'S subsidiary in California--Mexican workers sending money home to their families--is huge and the bank was subject to a fraud that cost Citi $250 million. Danny Boy doesn't like that kind of goings-on because Danny Boy like a great deal of the rest of the stuff he is regulating doesn't understand it. Subjective decision, and screw the shareholders.
Tarullo has been there for 5 out of an 8 year term. If Ms. Yellen has a brain in her head, she'll get him the hell out of there now. What this fool has almost done is to destroy Citicorp's public image and trust which in so doing lays a path for the beginning of a TBTF test. He's playing with lives here. It's time some adults got involved.
Monday, March 11, 2013
WHERE WERE YOU WHEN...
Jeff Immet's letter to shareholders came out today. We now know why the performance of GE on behalf of its shareholders has stunk: Washington is the problem. Too many regulations, too much in-fighting, too much politics, too much interference. Thanks, Jeff for telling us all that. We never thought it had anything to do with you...except didn't you accept the Chairmanship of some sort of bull *&^% committee that was to advise The Leader on business matters but never met? I guess you got a couple of "green" contracts thrown your way, subsidized with taxpayer dollars (read, MY MONEY)b It might it had been nice if you had figured out this startling revelation about four years ago, you jerk? Honest to goodness I'm getting sick and tired of Chief Executives and Chairman who can elucidate the obvious but when given an opportunity to stand up against bureaucratic political activism, cowardly fold like a cheap suit. One good thing you did do, Jeff, was to turn GE back into what people now think is a manufacturing company from the bank it had become. Good job, that...and speaking of banks...
I still can't get over the performance of Citicorp over the last year. The turn-around has been nothing if not remarkable and they now sit poised to have a real run. You might remember that two years ago I remarked that they are really the only American bank that is International in scope and particularly strong in emerging markets, and if there is to be a sweet spot this year it will be emerging markets. Heck of a job, but Citi joining the fold of solid financial institutions also ads to the realization of the contrast in quality between American and Euroland institutions. Unfortunately. that also poses a harbinger of what we might expect later in the year for the estimated one trillion euros in troubled assets in the Euro system surely must put a severe drag economic recovery with no solution in sight except for the passage of time which Euroland just may not be able to endure. It is remarkably quiet these days Over There but things will begin to bubble after the Papal election when Italy's politics will take center stage. Look for signs at the end of this week and we will begin to discuss what we should be looking for tomorrow.
You might note that there are two postings today, one being from last week. Two others were lost. Google doesn't seem to like getting stuff from an IPad which is bad news because we're off again on Friday for a full week and a bit more. Things are beginning to look up here in Zone Fly-Over. The daffs are up, the rains have come (no drought this year), farmer Brown is smiling and it appears we may be done with the snow. What could go wrong from here? Anything?
I still can't get over the performance of Citicorp over the last year. The turn-around has been nothing if not remarkable and they now sit poised to have a real run. You might remember that two years ago I remarked that they are really the only American bank that is International in scope and particularly strong in emerging markets, and if there is to be a sweet spot this year it will be emerging markets. Heck of a job, but Citi joining the fold of solid financial institutions also ads to the realization of the contrast in quality between American and Euroland institutions. Unfortunately. that also poses a harbinger of what we might expect later in the year for the estimated one trillion euros in troubled assets in the Euro system surely must put a severe drag economic recovery with no solution in sight except for the passage of time which Euroland just may not be able to endure. It is remarkably quiet these days Over There but things will begin to bubble after the Papal election when Italy's politics will take center stage. Look for signs at the end of this week and we will begin to discuss what we should be looking for tomorrow.
You might note that there are two postings today, one being from last week. Two others were lost. Google doesn't seem to like getting stuff from an IPad which is bad news because we're off again on Friday for a full week and a bit more. Things are beginning to look up here in Zone Fly-Over. The daffs are up, the rains have come (no drought this year), farmer Brown is smiling and it appears we may be done with the snow. What could go wrong from here? Anything?
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