Citi Reports Profit At Expense Of Financial Stability? Thank You Washington.

In January of this year we remarked about balance sheet shenanigans on Wall Street starting back up and we wrote at that time we were once again bearish on banks.  Since then many bank stocks have imploded.  Looky, looky, looky at what I found while reviewing Citi’s results.  Citi is now reporting a substantial profit using money taken from its loan loss reserves; more balance sheet shenanigans.

Hey, maybe hedge fund savant John Paulson should have called me back in January.  We could have had tea and crumpets or whatever royalty does during afternoon chats about important issues.  I could have told him he was going to lose his butt on Citi and Bank of America.   (Probably could have saved him all of his agony on Sino-Forest as well. )  What I would have really mentioned that he should liquidate his fund and leave with the mythical status of genius before the market destroyed that myth.  Or he could have read this blog for free six months ago and saved himself a cool billion.

Ain’t no rocket scientists running our financial, regulatory or political system.     Remember, one of the long term outcomes we have had on here is that the hedge fund industry and quantitative finance is going the way of the Dodo bird. 

All in good time.