Charts of City-Group - See Blog 11/15/2008
See the heavy red distribution and Sells that warned of very significant insider
This indicator was invented by TigerSoft in 1981. It is the hallmark of stocks
that make good short sales.
See 165 Page
Book "Killer Short Sale Techniques in Any Stock
Massive Insider Selling at Citigroup - 2008
Chart 2008 -----------
Note bearish down-trending Day Traders' Tool
Heavy Red Down-Day Volume is bearish.
New $20 Billion for
William Schmidt, Ph.D.
The 2008 Decline Been Rigged To Let Bankers Steal A Trillion Dollars?
Wall Street's 30% decline since late September can be seen as
part of a giant
extortion racket, to get the biggest bankers every penny they can from the US
By this view, the banks that want taxpayer money are spoiled, undeserving,
overweight cry babies. They seek to get all the money they can before Obama
President. By this view, the whole debacle looks and feels like one big
manipulation, facilitated by how easy the SEC has made short selling.
My own view is more complicated. The banks have been very badly managed. They
certainly do not deserve to be bailed out. There are much better ways to use $750
billion. It would have been better to just give every American $2500 and start a
new government owned and run bank to fill the void and to compete with the biggest banks,
if they unwilling to make new loans. The private banks would get the money soon
I do not think this is one gigantic bankers' conspiracy to get money. The crisis
is now all too real. And the banks really do not want the new regulation and
controls that now seem likely. Most important, the financial outlook is genuinely
One only has to look at the price charts of one stock after another to see how
all-encompassing the financial crisis has become, especially since Paulson scared
Congress into giving him the $750 billion for bankers. And, finally, a rally
overdue anyway, though the market will be pleased that some big unknowns are lifted
about the Obama Presidency.
Wall Street has now gotten what it wants from Obama. Obama's advisors
are well known friends of Wall Street bankers: Geithner, Larwrence Summers,
and Bob Rubin. And Obama has
said he would delay raising the taxes on the very
rich until 2011. There is no need for bankers to rush to take all they can from the
$750 billion bailout package. Obama will not change the present bailout approach
PAULSON'S BLUNDER AND PLUNDER
Investors have now lost almost 10 trillion dollars since mid 2007 with Paulson as the
Secretary of the Treasury. 23 trillion dollars has been wiped out around the world.
All last year and until the Spring of 2008, Paulson repeatedly assured Americans that
the economic and financial systems were "sound" and no economic stimuli
He was terribly wrong.
Then things changed. His own company's stock, Goldman Sachs, started to olunge.
Big banks like Lehman Brothers and Washington Mutual failed. Paulson suddenly went
into panic mode. He frightened the Congress into giving him $750 billion to give to
that's $750,000,000,000 (or about $2300 for every US citizen). He said
there would be
disastrous consequences otherwise.
In getting the bailout, he succeeded in one thing: he successfully scareed the
world's financial markets into a disastrous 30% across-the-board panic that caused
hedge funds to fail, commodity prices to plummet and stock markets around the world
to go into free-fall.
Paulson is not getting enough in return for the billions he is giving the banks. I
that he has gotten no guarantee that the banks will loan the money and no way once the
money is given to prevent the banks from using it to buy other banks, pay deferred
bonues, waste it on lavish resorts or pay big dividends to shareholders. Without the
government getting representation on the companies board of directors, it has no
against the banks wasting the money. The government would have gotten more for its
if it simply bought shares in the companies. "Paulson
has used the $700 billion in taxpayer
funds voted him by a labile Congress in September. Early on, Paulson put $125 billion in
the nine largest banks, including $10 billion for his old firm, Goldman Sachs. However,
if we compare the value of the equity share that $125 billion bought with the market price
of those banks stock, US taxpayers have paid $125 billion for bank stock that a
investor could have bought for $62.5 billion, according to a detailed analysis from Ron W.
This means that half of the publics money was simply a gift to
Paulsons Wall Street cronies.
Warren Buffett would have gotten much more for the taxpayers. When he invested $5
in Goldman Sachs and bought the same types of securitiespreferred stock and
he received preferred shares that pay a 10 percent dividend, while the public gets only
percent. Buffett also received at least seven and perhaps up to 14
times more warrants
than the Treasury did. On a percentage basis, his warrants were also much closer to
price of the shares. Paulson simply gave away half the money to his cronies.
CitiGroup Should Never Have Been Allowed To Get So Big!
With 374,000 employees world-wide, CitiGroup is the world's largest bank. We are
told by Paulson that it is too big to fail. Like an octypus, its tentacles reach out
directions, consumer banking, institutional banking, real estate lending, auto loans,
Primerica Financial Services and investment advise.
Other key banks hold immense positions in it. Barclay's holds nearly 238 millions
worth $4.8 billion. Mellon Banks has 79.2 million shares worth $1.6 billion and UBS
holds 75.3 million shares, worth $1.5 billion. It may be reasoned that the failure
might well mortally wound these companies, such would be the drop in their assets versus
their debts and so much would be the psychological damage to investors' confidence world
Clearly, it has been a huge mistake allowing CitiGroup to get so big. The Federal
Commission and Federal Reserve have miserably failed to protect the public int his
quite apart from the now very evident impossibility of administering efficiently and
prudently such a huge monster. These regulatory agencies, under laissez-faire
appointed by Bush. have blantantly disregarded their mandate to protect the public from
CituGroup's sheer power, as a vast oligarchy with boards of directors that are
Citigroup - Chief Financial Officer, Gary L Crittende
Bad decisions at the top to make loans to home owners, much more aggressively
than many other banks did, has laid Citigroup low. The people at the top wanted the
numbers to get their million dollar bonuses, but did not want to hear about how
bad many of the loans were. Now it is the taxpayer and all Americans who are
made to pay the still exorbitant salaries at CitiGroup to the very same managers who
made this mess.
became ensnared in murky financial dealings with the defunct energy
company Enron, which drew the attention of federal investigators; it was criticized by law
enforcement officials for the role one of its prominent research analysts played during
telecom bubble several years ago; and it found itself in the middle of regulatory
in Britain and Japan....As it built up that business, it used accounting maneuvers to move
billions of dollars of the troubled assets off its books, freeing capital so the bank
Executive pay at CitiGroup is a profanity. It payed its Chief Financial Officer,
Gary L Crittenden $19.2
million this past year. He should be fired and sued for malfeasance!
He has overseen the company's chief finance officer since March 12, 2007. He is a
Harvard MBA, just like George Bush.
Robert Rubin Advocated Using More Leverage at Citigroup
Citigroup insiders and analysts say that its
former CEO until 2007 and Rubin played
pivotal by drafting and implementing a "strategy that involved taking greater trading
to expand its business and reap higher profits." In fact, it was Rubin who
benefits of being more aggressive to the new CEO, Charles Prince, in 2002 and how
best to do so. ""Chuck was totally
new to the job. He didn't know a C.D.O. from a grocery
list, so he looked for someone for advice and support. That person was Rubin. And
had always been an advocate of being more aggressive in the capital markets arena. He
would say, 'You have to take more risk if you want to earn more.' " (Source. )
Clinton's Ex-Treasury Secretary, Robert Rubin, is now dancing
quickly away from
controversial Citigroup. But the fact remains that "(h)e
has collected more than $150
million in cash and stock over eight years to serve as the banks elder statesman,
with important clients and building relationships with government and business leaders
around the world, though his contract states that he is to have no daily operational
Selling by Robert Rubin at CitiGroup
||RUBIN ROBERT E
||Sale at $55.05 - $55.05
||RUBIN ROBERT E
Open Market) at $0 per share.
||RUBIN ROBERT E
||Disposition (Non Open Market) at $48.36 - $48.36 per
||RUBIN ROBERT E
||Option Exercise at $33.44 - $33.44 per share.
As much as anyone in Citigroup, Rubin advocated using more leverage to make
more loans to make more money. A year ago I noted that he must have known dire
was going to engulf CitiGroup as a result of its use of levevage and its lack of controls
on the quality of their loans. So, Rubin sold almost 400,000 shares when the stock
between 33 and 55 and he turned down the CEO job. He
denies this. He claimed that
"Few if anyone" anticipated the financial meltdown. Not remotely
true. See NYU Professor
Rubini's dire warnings to International Monetary Fund in late 2006 and ever since.
THESE BANKERS KNEW THAT THEY WERE COMMITING FRAUD
All these bankers knew they were making poor quality loans. They knew it. They
did it anyway, because someone else, they calculated would own the bundled mortgages
they way selling as AAA quality to investors around the world. "There's really no profit in
remaining ethical. Perhaps we should teach our children to incorporate, then rip off every
single sucker they can and retire at 40. Join a a gang and commit crimes under mob rule -
that's the ticket to success in the good old U.S. of A. it seems to me. I don't think any of
them are even the least bit ashamed. " (Source.)
"Whistle blowers (people who complained
that 'this ain't right') were fired, excluded, demoted, transferred away from Realty
Mortgage Brokers, Banks and Appraisers offices across the country - The reason I call them
whistle blowers because it's become apparent that the people calling foul in the mortgage
lending industry were correct, while they were punished by their peers both financially
emotionally for pointing out the moral hazards of their occupation."
appraisers and loan officers were penalized, blacklisted, not payed and fired.
talking to a senior underwriter for a major Wall Street bank, she shared with me that she
had witnessed the sinister inner workings of the lending industry first hand. The
job is to provide an unbiased assessment of the risk level of a particular loan."
Robert Rubin's Role in Making The National Housing Bubble
As Treasury Secretary for Clinton, Robert Rubin lobbied hard to get the President to
allow banks to get into the securities' business, thereby giving them new reason to make
unsafe loans and exaggerate their safety as they package them to others to invest in.
(See TigerSoft Blog and
News Service - 9/21/2008 - Monopoly Finance)
Judge tosses most claims in Citigroup lawsuit
2/26/2009 Delaware judge dismisses most claims in Citigroup subprime lawsuit
DOVER, Del. (AP) -- A Delaware judge has dismissed most claims in a shareholder lawsuit
seeking to hold Citigroup Inc. directors liable for losses related to the subprime
mortgage market. In a ruling issued Tuesday, the court said the
plaintiffs had failed to show that officials for New York-based Citigroup breached their
oversight obligations or acted
in bad faith in monitoring the company's exposure to subprime securities.
The judge did allow the plaintiffs to pursue claims related to the board's approval of a
$68 million departure
package for former Citigroup CEO Charles Prince, who left the company in 2007.
Shareholders alleged that
current and former directors and officers of Citigroup breached their fiduciary duties by
failing to properly monitor
and disclose the company's exposure to subprime securities.
Comments by Bill M form Bethlehem, PA
"Delaware also cranks out more money by having the most pro-business laws, including
laws that make it by far
the most favorable for business (which is why the huge majority of U.S. companies are
registered as Delaware
corporations, thus giving the state a huge windfall from registration fees). Unfortunately
for the consumer, Delaware's
pro-business climate can also mean anti-consumer--the sleazy payday-loan industry, for
instance, relies on Delaware
banks to front the funds, since DE is one of the very few states that have virtually no
usury (loan-sharking) laws."